Correlation Between Stifel Financial and Charles Schwab
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Charles Schwab 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 Stifel Financial and Charles Schwab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial Corp and The Charles Schwab, you can compare the effects of market volatilities on Stifel Financial and Charles Schwab 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 Stifel Financial with a short position of Charles Schwab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Charles Schwab.
Diversification Opportunities for Stifel Financial and Charles Schwab
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stifel and Charles is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial Corp and The Charles Schwab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charles Schwab and Stifel 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 Stifel Financial Corp are associated (or correlated) with Charles Schwab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charles Schwab has no effect on the direction of Stifel Financial i.e., Stifel Financial and Charles Schwab go up and down completely randomly.
Pair Corralation between Stifel Financial and Charles Schwab
Assuming the 90 days horizon Stifel Financial Corp is expected to generate 0.51 times more return on investment than Charles Schwab. However, Stifel Financial Corp is 1.98 times less risky than Charles Schwab. It trades about 0.0 of its potential returns per unit of risk. The Charles Schwab is currently generating about -0.22 per unit of risk. If you would invest 2,500 in Stifel Financial Corp on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Stifel Financial Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial Corp vs. The Charles Schwab
Performance |
| Timeline |
| Stifel Financial Corp |
| Charles Schwab |
Stifel Financial and Charles Schwab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Charles Schwab
The main advantage of trading using opposite Stifel Financial and Charles Schwab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Charles Schwab 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 Charles Schwab will offset losses from the drop in Charles Schwab's long position.| Stifel Financial vs. Perella Weinberg Partners | Stifel Financial vs. Oppenheimer Holdings | Stifel Financial vs. Stifel Financial Corp | Stifel Financial vs. Piper Sandler Companies |
| Charles Schwab vs. The Charles Schwab | Charles Schwab vs. JPMorgan Chase Co | Charles Schwab vs. Morgan Stanley | Charles Schwab 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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