Correlation Between Stifel Financial and Orchid Island
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Orchid Island 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 Orchid Island into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Orchid Island Capital, you can compare the effects of market volatilities on Stifel Financial and Orchid Island 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 Orchid Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Orchid Island.
Diversification Opportunities for Stifel Financial and Orchid Island
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stifel and Orchid is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Orchid Island Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orchid Island Capital 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 Orchid Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orchid Island Capital has no effect on the direction of Stifel Financial i.e., Stifel Financial and Orchid Island go up and down completely randomly.
Pair Corralation between Stifel Financial and Orchid Island
Allowing for the 90-day total investment horizon Stifel Financial is expected to under-perform the Orchid Island. But the stock apears to be less risky and, when comparing its historical volatility, Stifel Financial is 1.09 times less risky than Orchid Island. The stock trades about -0.1 of its potential returns per unit of risk. The Orchid Island Capital is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 789.00 in Orchid Island Capital on November 18, 2024 and sell it today you would earn a total of 88.00 from holding Orchid Island Capital or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. Orchid Island Capital
Performance |
| Timeline |
| Stifel Financial |
| Orchid Island Capital |
Stifel Financial and Orchid Island Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Orchid Island
The main advantage of trading using opposite Stifel Financial and Orchid Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Orchid Island 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 Orchid Island will offset losses from the drop in Orchid Island'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 |
| Orchid Island vs. AGNC Investment Corp | Orchid Island vs. Two Harbors Investments | Orchid Island vs. Invesco Mortgage Capital | Orchid Island vs. Chimera Investment |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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