Correlation Between NACCO Industries and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both NACCO Industries 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 NACCO Industries and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NACCO Industries and Stifel Financial, you can compare the effects of market volatilities on NACCO Industries 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 NACCO Industries with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NACCO Industries and Stifel Financial.
Diversification Opportunities for NACCO Industries and Stifel Financial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NACCO and Stifel is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding NACCO Industries and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial and NACCO Industries 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 NACCO Industries 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 NACCO Industries i.e., NACCO Industries and Stifel Financial go up and down completely randomly.
Pair Corralation between NACCO Industries and Stifel Financial
Allowing for the 90-day total investment horizon NACCO Industries is expected to generate 3.95 times more return on investment than Stifel Financial. However, NACCO Industries is 3.95 times more volatile than Stifel Financial. It trades about 0.11 of its potential returns per unit of risk. Stifel Financial is currently generating about -0.07 per unit of risk. If you would invest 2,712 in NACCO Industries on August 31, 2024 and sell it today you would earn a total of 490.00 from holding NACCO Industries or generate 18.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NACCO Industries vs. Stifel Financial
Performance |
| Timeline |
| NACCO Industries |
| Stifel Financial |
NACCO Industries and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NACCO Industries and Stifel Financial
The main advantage of trading using opposite NACCO Industries and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NACCO Industries 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.| NACCO Industries vs. Alliance Resource Partners | NACCO Industries vs. Hallador Energy | NACCO Industries vs. Consol Energy | NACCO Industries vs. Indo Tambangraya Megah |
| Stifel Financial vs. Reinsurance Group of | Stifel Financial vs. Southern Co | Stifel Financial vs. DTE Energy Co | Stifel Financial vs. Georgia Power 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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