Correlation Between Stifel Financial and MarketAxess Holdings
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and MarketAxess Holdings 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 MarketAxess Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and MarketAxess Holdings, you can compare the effects of market volatilities on Stifel Financial and MarketAxess Holdings 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 MarketAxess Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and MarketAxess Holdings.
Diversification Opportunities for Stifel Financial and MarketAxess Holdings
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stifel and MarketAxess is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and MarketAxess Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MarketAxess Holdings 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 MarketAxess Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MarketAxess Holdings has no effect on the direction of Stifel Financial i.e., Stifel Financial and MarketAxess Holdings go up and down completely randomly.
Pair Corralation between Stifel Financial and MarketAxess Holdings
Allowing for the 90-day total investment horizon Stifel Financial is expected to under-perform the MarketAxess Holdings. In addition to that, Stifel Financial is 1.22 times more volatile than MarketAxess Holdings. It trades about -0.42 of its total potential returns per unit of risk. MarketAxess Holdings is currently generating about 0.26 per unit of volatility. If you would invest 19,543 in MarketAxess Holdings on December 11, 2024 and sell it today you would earn a total of 1,714 from holding MarketAxess Holdings or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. MarketAxess Holdings
Performance |
| Timeline |
| Stifel Financial |
| MarketAxess Holdings |
Stifel Financial and MarketAxess Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and MarketAxess Holdings
The main advantage of trading using opposite Stifel Financial and MarketAxess Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, MarketAxess Holdings 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 MarketAxess Holdings will offset losses from the drop in MarketAxess Holdings' 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 |
| MarketAxess Holdings vs. Interactive Brokers Group | MarketAxess Holdings vs. Evercore Partners | MarketAxess Holdings vs. PJT Partners | MarketAxess Holdings vs. LPL Financial Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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