Correlation Between Stifel Financial and Better Home
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Better Home 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 Better Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Better Home Finance, you can compare the effects of market volatilities on Stifel Financial and Better Home 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 Better Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Better Home.
Diversification Opportunities for Stifel Financial and Better Home
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stifel and Better is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Better Home Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Home Finance 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 are associated (or correlated) with Better Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Home Finance has no effect on the direction of Stifel Financial i.e., Stifel Financial and Better Home go up and down completely randomly.
Pair Corralation between Stifel Financial and Better Home
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 0.75 times more return on investment than Better Home. However, Stifel Financial is 1.34 times less risky than Better Home. It trades about 0.18 of its potential returns per unit of risk. Better Home Finance is currently generating about 0.03 per unit of risk. If you would invest 10,362 in Stifel Financial on September 1, 2024 and sell it today you would earn a total of 1,218 from holding Stifel Financial or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. Better Home Finance
Performance |
| Timeline |
| Stifel Financial |
| Better Home Finance |
Stifel Financial and Better Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Better Home
The main advantage of trading using opposite Stifel Financial and Better Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Better Home 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 Better Home will offset losses from the drop in Better Home's long position.| Stifel Financial vs. Lazard | Stifel Financial vs. PJT Partners | Stifel Financial vs. Houlihan Lokey | Stifel Financial vs. Piper Sandler Companies |
| Better Home vs. Thor Industries | Better Home vs. Mativ Holdings | Better Home vs. PACCAR Inc | Better Home vs. Wabash National |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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