Correlation Between NYSE Composite and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Stifel Financial Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Stifel Financial.
Diversification Opportunities for NYSE Composite and Stifel Financial
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Stifel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Stifel Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and Stifel Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.71 times more return on investment than Stifel Financial. However, NYSE Composite is 1.42 times less risky than Stifel Financial. It trades about 0.11 of its potential returns per unit of risk. Stifel Financial Corp is currently generating about 0.03 per unit of risk. If you would invest 1,549,991 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 477,213 from holding NYSE Composite or generate 30.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Stifel Financial Corp
Performance |
| Timeline |
NYSE Composite and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Stifel Financial Corp
Pair trading matchups for Stifel Financial
Pair Trading with NYSE Composite and Stifel Financial
The main advantage of trading using opposite NYSE Composite and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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