Correlation Between Stifel Financial and NXG NextGen
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and NXG NextGen 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 NXG NextGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and NXG NextGen Infrastructure, you can compare the effects of market volatilities on Stifel Financial and NXG NextGen 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 NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and NXG NextGen.
Diversification Opportunities for Stifel Financial and NXG NextGen
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Stifel and NXG is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr 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 NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of Stifel Financial i.e., Stifel Financial and NXG NextGen go up and down completely randomly.
Pair Corralation between Stifel Financial and NXG NextGen
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 1.22 times more return on investment than NXG NextGen. However, Stifel Financial is 1.22 times more volatile than NXG NextGen Infrastructure. It trades about 0.16 of its potential returns per unit of risk. NXG NextGen Infrastructure is currently generating about 0.13 per unit of risk. If you would invest 7,958 in Stifel Financial on August 24, 2024 and sell it today you would earn a total of 3,543 from holding Stifel Financial or generate 44.52% 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. NXG NextGen Infrastructure
Performance |
| Timeline |
| Stifel Financial |
| NXG NextGen Infrastr |
Stifel Financial and NXG NextGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and NXG NextGen
The main advantage of trading using opposite Stifel Financial and NXG NextGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, NXG NextGen 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 NXG NextGen will offset losses from the drop in NXG NextGen's long position.| Stifel Financial vs. SCOR PK | Stifel Financial vs. Aquagold International | Stifel Financial vs. Small Cap Core | Stifel Financial vs. Morningstar Unconstrained Allocation |
| NXG NextGen vs. MFS Investment Grade | NXG NextGen vs. Invesco High Income | NXG NextGen vs. Eaton Vance National | NXG NextGen vs. Nuveen California Select |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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