Correlation Between Stifel Financial and Entergy Arkansas
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Entergy Arkansas 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 Entergy Arkansas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Entergy Arkansas LLC, you can compare the effects of market volatilities on Stifel Financial and Entergy Arkansas 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 Entergy Arkansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Entergy Arkansas.
Diversification Opportunities for Stifel Financial and Entergy Arkansas
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stifel and Entergy is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Entergy Arkansas LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entergy Arkansas LLC 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 Entergy Arkansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entergy Arkansas LLC has no effect on the direction of Stifel Financial i.e., Stifel Financial and Entergy Arkansas go up and down completely randomly.
Pair Corralation between Stifel Financial and Entergy Arkansas
Considering the 90-day investment horizon Stifel Financial is expected to generate 1.78 times more return on investment than Entergy Arkansas. However, Stifel Financial is 1.78 times more volatile than Entergy Arkansas LLC. It trades about 0.02 of its potential returns per unit of risk. Entergy Arkansas LLC is currently generating about 0.04 per unit of risk. If you would invest 2,014 in Stifel Financial on August 31, 2024 and sell it today you would earn a total of 200.00 from holding Stifel Financial or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Stifel Financial vs. Entergy Arkansas LLC
Performance |
| Timeline |
| Stifel Financial |
| Entergy Arkansas LLC |
Stifel Financial and Entergy Arkansas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Entergy Arkansas
The main advantage of trading using opposite Stifel Financial and Entergy Arkansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Entergy Arkansas 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 Entergy Arkansas will offset losses from the drop in Entergy Arkansas' long position.| Stifel Financial vs. Reinsurance Group of | Stifel Financial vs. Southern Co | Stifel Financial vs. DTE Energy Co | Stifel Financial vs. Georgia Power Co |
| Entergy Arkansas vs. Entergy Mississippi LLC | Entergy Arkansas vs. Entergy New Orleans | Entergy Arkansas vs. Entergy Louisiana LLC | Entergy Arkansas vs. Southern Co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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