Correlation Between LPL Financial and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both LPL Financial 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 LPL Financial and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LPL Financial Holdings and Stifel Financial, you can compare the effects of market volatilities on LPL Financial 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 LPL Financial with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LPL Financial and Stifel Financial.
Diversification Opportunities for LPL Financial and Stifel Financial
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LPL and Stifel is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding LPL Financial Holdings and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial and LPL Financial 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 LPL Financial Holdings 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 has no effect on the direction of LPL Financial i.e., LPL Financial and Stifel Financial go up and down completely randomly.
Pair Corralation between LPL Financial and Stifel Financial
Given the investment horizon of 90 days LPL Financial Holdings is expected to generate 0.94 times more return on investment than Stifel Financial. However, LPL Financial Holdings is 1.06 times less risky than Stifel Financial. It trades about 0.32 of its potential returns per unit of risk. Stifel Financial is currently generating about 0.16 per unit of risk. If you would invest 26,538 in LPL Financial Holdings on August 30, 2024 and sell it today you would earn a total of 6,034 from holding LPL Financial Holdings or generate 22.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LPL Financial Holdings vs. Stifel Financial
Performance |
| Timeline |
| LPL Financial Holdings |
| Stifel Financial |
LPL Financial and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LPL Financial and Stifel Financial
The main advantage of trading using opposite LPL Financial and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LPL Financial 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.| LPL Financial vs. Tradeweb Markets | LPL Financial vs. Raymond James Financial | LPL Financial vs. PJT Partners | LPL Financial vs. Moelis Co |
| Stifel Financial vs. Raymond James Financial | Stifel Financial vs. Selective Insurance Group | Stifel Financial vs. Reinsurance Group of | Stifel Financial vs. Houlihan Lokey |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |