Correlation Between Stifel Financial and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Wells Fargo 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 Wells Fargo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Wells Fargo Co, you can compare the effects of market volatilities on Stifel Financial and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Wells Fargo.
Diversification Opportunities for Stifel Financial and Wells Fargo
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stifel and Wells is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Wells Fargo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo has no effect on the direction of Stifel Financial i.e., Stifel Financial and Wells Fargo go up and down completely randomly.
Pair Corralation between Stifel Financial and Wells Fargo
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 4.84 times more return on investment than Wells Fargo. However, Stifel Financial is 4.84 times more volatile than Wells Fargo Co. It trades about 0.09 of its potential returns per unit of risk. Wells Fargo Co is currently generating about 0.06 per unit of risk. If you would invest 5,829 in Stifel Financial on September 3, 2024 and sell it today you would earn a total of 5,751 from holding Stifel Financial or generate 98.66% 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. Wells Fargo Co
Performance |
| Timeline |
| Stifel Financial |
| Wells Fargo |
Stifel Financial and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Wells Fargo
The main advantage of trading using opposite Stifel Financial and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.| Stifel Financial vs. Riot Blockchain | Stifel Financial vs. Marathon Digital Holdings | Stifel Financial vs. Applied Blockchain | Stifel Financial vs. Hut 8 Corp |
| Wells Fargo vs. Mayfair Gold Corp | Wells Fargo vs. Porvair plc | Wells Fargo vs. Artisan Partners Asset | Wells Fargo vs. Alaska Air Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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