Correlation Between Stifel Financial and Medallion Financial
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Medallion Financial 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 Medallion Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Medallion Financial Corp, you can compare the effects of market volatilities on Stifel Financial and Medallion Financial 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 Medallion Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Medallion Financial.
Diversification Opportunities for Stifel Financial and Medallion Financial
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Stifel and Medallion is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Medallion Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medallion Financial 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 Medallion Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medallion Financial Corp has no effect on the direction of Stifel Financial i.e., Stifel Financial and Medallion Financial go up and down completely randomly.
Pair Corralation between Stifel Financial and Medallion Financial
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 1.78 times more return on investment than Medallion Financial. However, Stifel Financial is 1.78 times more volatile than Medallion Financial Corp. It trades about 0.18 of its potential returns per unit of risk. Medallion Financial Corp is currently generating about 0.11 per unit of risk. If you would invest 10,514 in Stifel Financial on August 27, 2024 and sell it today you would earn a total of 1,258 from holding Stifel Financial or generate 11.96% 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. Medallion Financial Corp
Performance |
| Timeline |
| Stifel Financial |
| Medallion Financial Corp |
Stifel Financial and Medallion Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Medallion Financial
The main advantage of trading using opposite Stifel Financial and Medallion Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Medallion Financial 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 Medallion Financial will offset losses from the drop in Medallion Financial'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 |
| Medallion Financial vs. Midland States Bancorp | Medallion Financial vs. Western New England | Medallion Financial vs. Merchants Bancorp | Medallion Financial vs. MidWestOne Financial Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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