Correlation Between Stifel Financial and New Mountain
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and New Mountain 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 New Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and New Mountain Finance, you can compare the effects of market volatilities on Stifel Financial and New Mountain 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 New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and New Mountain.
Diversification Opportunities for Stifel Financial and New Mountain
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stifel and New is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance 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 New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of Stifel Financial i.e., Stifel Financial and New Mountain go up and down completely randomly.
Pair Corralation between Stifel Financial and New Mountain
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 2.29 times more return on investment than New Mountain. However, Stifel Financial is 2.29 times more volatile than New Mountain Finance. It trades about 0.18 of its potential returns per unit of risk. New Mountain Finance is currently generating about 0.11 per unit of risk. If you would invest 10,514 in Stifel Financial on August 28, 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. New Mountain Finance
Performance |
| Timeline |
| Stifel Financial |
| New Mountain Finance |
Stifel Financial and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and New Mountain
The main advantage of trading using opposite Stifel Financial and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain'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 |
| New Mountain vs. PowerUp Acquisition Corp | New Mountain vs. Aurora Innovation | New Mountain vs. HUMANA INC | New Mountain 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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