Correlation Between Stifel Financial and Cohen
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Cohen 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 Cohen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Cohen Company, you can compare the effects of market volatilities on Stifel Financial and Cohen 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 Cohen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Cohen.
Diversification Opportunities for Stifel Financial and Cohen
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stifel and Cohen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Cohen Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Company 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 Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Company has no effect on the direction of Stifel Financial i.e., Stifel Financial and Cohen go up and down completely randomly.
Pair Corralation between Stifel Financial and Cohen
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 2.17 times less return on investment than Cohen. But when comparing it to its historical volatility, Stifel Financial is 1.51 times less risky than Cohen. It trades about 0.16 of its potential returns per unit of risk. Cohen Company is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 814.00 in Cohen Company on August 29, 2024 and sell it today you would earn a total of 201.00 from holding Cohen Company or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. Cohen Company
Performance |
| Timeline |
| Stifel Financial |
| Cohen Company |
Stifel Financial and Cohen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Cohen
The main advantage of trading using opposite Stifel Financial and Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Cohen 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 Cohen will offset losses from the drop in Cohen's long position.| Stifel Financial vs. Raymond James Financial | Stifel Financial vs. Evercore Partners | Stifel Financial vs. Selective Insurance Group | 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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