Correlation Between Oxford Square and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both Oxford Square 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 Oxford Square and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Square Capital and Stifel Financial, you can compare the effects of market volatilities on Oxford Square 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 Oxford Square with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Square and Stifel Financial.
Diversification Opportunities for Oxford Square and Stifel Financial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oxford and Stifel is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Square Capital and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial and Oxford Square 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 Oxford Square Capital 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 Oxford Square i.e., Oxford Square and Stifel Financial go up and down completely randomly.
Pair Corralation between Oxford Square and Stifel Financial
Assuming the 90 days horizon Oxford Square Capital is expected to generate 0.38 times more return on investment than Stifel Financial. However, Oxford Square Capital is 2.64 times less risky than Stifel Financial. It trades about 0.07 of its potential returns per unit of risk. Stifel Financial is currently generating about 0.02 per unit of risk. If you would invest 2,046 in Oxford Square Capital on August 27, 2024 and sell it today you would earn a total of 428.00 from holding Oxford Square Capital or generate 20.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Square Capital vs. Stifel Financial
Performance |
| Timeline |
| Oxford Square Capital |
| Stifel Financial |
Oxford Square and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Square and Stifel Financial
The main advantage of trading using opposite Oxford Square and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Square 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.The idea behind Oxford Square Capital and Stifel Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Stifel Financial vs. Brighthouse Financial | Stifel Financial vs. American Financial Group | Stifel Financial vs. CMS Energy Corp | Stifel Financial vs. Reinsurance Group of |
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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