Correlation Between Stifel Financial and Sprott Focus
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Sprott Focus 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 Sprott Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Sprott Focus Trust, you can compare the effects of market volatilities on Stifel Financial and Sprott Focus 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 Sprott Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Sprott Focus.
Diversification Opportunities for Stifel Financial and Sprott Focus
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stifel and Sprott is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Sprott Focus Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Focus Trust 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 Sprott Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Focus Trust has no effect on the direction of Stifel Financial i.e., Stifel Financial and Sprott Focus go up and down completely randomly.
Pair Corralation between Stifel Financial and Sprott Focus
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 3.34 times more return on investment than Sprott Focus. However, Stifel Financial is 3.34 times more volatile than Sprott Focus Trust. It trades about 0.18 of its potential returns per unit of risk. Sprott Focus Trust is currently generating about 0.14 per unit of risk. If you would invest 10,349 in Stifel Financial on August 26, 2024 and sell it today you would earn a total of 1,273 from holding Stifel Financial or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. Sprott Focus Trust
Performance |
| Timeline |
| Stifel Financial |
| Sprott Focus Trust |
Stifel Financial and Sprott Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Sprott Focus
The main advantage of trading using opposite Stifel Financial and Sprott Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Sprott Focus 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 Sprott Focus will offset losses from the drop in Sprott Focus' 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 |
| Sprott Focus vs. PowerUp Acquisition Corp | Sprott Focus vs. Aurora Innovation | Sprott Focus vs. HUMANA INC | Sprott Focus vs. Aquagold International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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