Correlation Between Stifel Financial and PGIM Short
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and PGIM Short 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 PGIM Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and PGIM Short Duration, you can compare the effects of market volatilities on Stifel Financial and PGIM Short 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 PGIM Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and PGIM Short.
Diversification Opportunities for Stifel Financial and PGIM Short
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stifel and PGIM is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and PGIM Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Short Duration 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 PGIM Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Short Duration has no effect on the direction of Stifel Financial i.e., Stifel Financial and PGIM Short go up and down completely randomly.
Pair Corralation between Stifel Financial and PGIM Short
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 5.96 times more return on investment than PGIM Short. However, Stifel Financial is 5.96 times more volatile than PGIM Short Duration. It trades about 0.17 of its potential returns per unit of risk. PGIM Short Duration is currently generating about 0.01 per unit of risk. If you would invest 10,415 in Stifel Financial on August 31, 2024 and sell it today you would earn a total of 1,213 from holding Stifel Financial or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Stifel Financial vs. PGIM Short Duration
Performance |
| Timeline |
| Stifel Financial |
| PGIM Short Duration |
Stifel Financial and PGIM Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and PGIM Short
The main advantage of trading using opposite Stifel Financial and PGIM Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, PGIM Short 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 PGIM Short will offset losses from the drop in PGIM Short'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 |
| PGIM Short vs. John Hancock Income | PGIM Short vs. MFS High Income | PGIM Short vs. MFS Investment Grade | PGIM Short vs. Blackrock Muniholdings Closed |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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