Correlation Between Stifel Financial and Freedom Holding
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Freedom Holding 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 Freedom Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Freedom Holding Corp, you can compare the effects of market volatilities on Stifel Financial and Freedom Holding 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 Freedom Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Freedom Holding.
Diversification Opportunities for Stifel Financial and Freedom Holding
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Stifel and Freedom is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Freedom Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Holding Corp 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 Freedom Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Holding Corp has no effect on the direction of Stifel Financial i.e., Stifel Financial and Freedom Holding go up and down completely randomly.
Pair Corralation between Stifel Financial and Freedom Holding
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 1.09 times less return on investment than Freedom Holding. But when comparing it to its historical volatility, Stifel Financial is 1.41 times less risky than Freedom Holding. It trades about 0.09 of its potential returns per unit of risk. Freedom Holding Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,423 in Freedom Holding Corp on August 27, 2024 and sell it today you would earn a total of 5,324 from holding Freedom Holding Corp or generate 82.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. Freedom Holding Corp
Performance |
| Timeline |
| Stifel Financial |
| Freedom Holding Corp |
Stifel Financial and Freedom Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Freedom Holding
The main advantage of trading using opposite Stifel Financial and Freedom Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Freedom Holding 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 Freedom Holding will offset losses from the drop in Freedom Holding'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 |
| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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