Correlation Between JPMorgan Chase and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase and Stifel Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JPMorgan Chase and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Chase Co and Stifel Financial Corp, you can compare the effects of market volatilities on JPMorgan Chase and Stifel Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JPMorgan Chase with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and Stifel Financial.
Diversification Opportunities for JPMorgan Chase and Stifel Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JPMorgan and Stifel is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co and Stifel Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial Corp and JPMorgan Chase is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JPMorgan Chase Co are associated (or correlated) with Stifel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stifel Financial Corp has no effect on the direction of JPMorgan Chase i.e., JPMorgan Chase and Stifel Financial go up and down completely randomly.
Pair Corralation between JPMorgan Chase and Stifel Financial
Assuming the 90 days trading horizon JPMorgan Chase Co is expected to under-perform the Stifel Financial. In addition to that, JPMorgan Chase is 1.56 times more volatile than Stifel Financial Corp. It trades about -0.09 of its total potential returns per unit of risk. Stifel Financial Corp is currently generating about 0.17 per unit of volatility. If you would invest 2,475 in Stifel Financial Corp on September 1, 2024 and sell it today you would earn a total of 62.00 from holding Stifel Financial Corp or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. Stifel Financial Corp
Performance |
| Timeline |
| JPMorgan Chase |
| Stifel Financial Corp |
JPMorgan Chase and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and Stifel Financial
The main advantage of trading using opposite JPMorgan Chase and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase position performs unexpectedly, Stifel Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Stifel Financial will offset losses from the drop in Stifel Financial's long position.| JPMorgan Chase vs. JPMorgan Chase Co | JPMorgan Chase vs. JPMorgan Chase Co | JPMorgan Chase vs. Bank of America | JPMorgan Chase vs. Wells Fargo |
| Stifel Financial vs. The Charles Schwab | Stifel Financial vs. JPMorgan Chase Co | Stifel Financial vs. Morgan Stanley | Stifel Financial vs. JPMorgan Chase Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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