Correlation Between Stifel Financial and First Internet
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and First Internet 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 First Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and First Internet Bancorp, you can compare the effects of market volatilities on Stifel Financial and First Internet 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 First Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and First Internet.
Diversification Opportunities for Stifel Financial and First Internet
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stifel and First is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and First Internet Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Internet Bancorp 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 First Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Internet Bancorp has no effect on the direction of Stifel Financial i.e., Stifel Financial and First Internet go up and down completely randomly.
Pair Corralation between Stifel Financial and First Internet
Considering the 90-day investment horizon Stifel Financial is expected to under-perform the First Internet. In addition to that, Stifel Financial is 1.93 times more volatile than First Internet Bancorp. It trades about -0.1 of its total potential returns per unit of risk. First Internet Bancorp is currently generating about 0.19 per unit of volatility. If you would invest 2,481 in First Internet Bancorp on August 27, 2024 and sell it today you would earn a total of 40.00 from holding First Internet Bancorp or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial vs. First Internet Bancorp
Performance |
| Timeline |
| Stifel Financial |
| First Internet Bancorp |
Stifel Financial and First Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and First Internet
The main advantage of trading using opposite Stifel Financial and First Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, First Internet 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 First Internet will offset losses from the drop in First Internet's 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 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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