Correlation Between Stifel Financial and Magic Empire
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Magic Empire 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 Magic Empire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Magic Empire Global, you can compare the effects of market volatilities on Stifel Financial and Magic Empire 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 Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Magic Empire.
Diversification Opportunities for Stifel Financial and Magic Empire
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stifel and Magic is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Magic Empire Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magic Empire Global 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 Magic Empire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magic Empire Global has no effect on the direction of Stifel Financial i.e., Stifel Financial and Magic Empire go up and down completely randomly.
Pair Corralation between Stifel Financial and Magic Empire
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 0.96 times more return on investment than Magic Empire. However, Stifel Financial is 1.04 times less risky than Magic Empire. It trades about 0.16 of its potential returns per unit of risk. Magic Empire Global is currently generating about 0.04 per unit of risk. If you would invest 10,476 in Stifel Financial on August 30, 2024 and sell it today you would earn a total of 1,152 from holding Stifel Financial or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Stifel Financial vs. Magic Empire Global
Performance |
| Timeline |
| Stifel Financial |
| Magic Empire Global |
Stifel Financial and Magic Empire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Magic Empire
The main advantage of trading using opposite Stifel Financial and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Magic Empire 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 Magic Empire will offset losses from the drop in Magic Empire's long position.| Stifel Financial vs. Raymond James Financial | Stifel Financial vs. Selective Insurance Group | Stifel Financial vs. Reinsurance Group of | Stifel Financial vs. Houlihan Lokey |
| Magic Empire vs. Netcapital | Magic Empire vs. Applied Blockchain | Magic Empire vs. Zhong Yang Financial | Magic Empire vs. Mercurity Fintech Holding |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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