Correlation Between Stonex and Piper Sandler
Can any of the company-specific risk be diversified away by investing in both Stonex and Piper Sandler 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 Stonex and Piper Sandler into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stonex Group and Piper Sandler Companies, you can compare the effects of market volatilities on Stonex and Piper Sandler 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 Stonex with a short position of Piper Sandler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stonex and Piper Sandler.
Diversification Opportunities for Stonex and Piper Sandler
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Stonex and Piper is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Stonex Group and Piper Sandler Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piper Sandler Companies and Stonex 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 Stonex Group are associated (or correlated) with Piper Sandler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piper Sandler Companies has no effect on the direction of Stonex i.e., Stonex and Piper Sandler go up and down completely randomly.
Pair Corralation between Stonex and Piper Sandler
Given the investment horizon of 90 days Stonex is expected to generate 1.16 times less return on investment than Piper Sandler. But when comparing it to its historical volatility, Stonex Group is 1.97 times less risky than Piper Sandler. It trades about 0.38 of its potential returns per unit of risk. Piper Sandler Companies is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 27,999 in Piper Sandler Companies on August 26, 2024 and sell it today you would earn a total of 6,072 from holding Piper Sandler Companies or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stonex Group vs. Piper Sandler Companies
Performance |
| Timeline |
| Stonex Group |
| Piper Sandler Companies |
Stonex and Piper Sandler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stonex and Piper Sandler
The main advantage of trading using opposite Stonex and Piper Sandler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stonex position performs unexpectedly, Piper Sandler 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 Piper Sandler will offset losses from the drop in Piper Sandler's long position.| Stonex vs. PJT Partners | Stonex vs. Houlihan Lokey | Stonex vs. Stifel Financial | Stonex vs. Evercore Partners |
| Piper Sandler vs. Perella Weinberg Partners | Piper Sandler vs. Evercore Partners | Piper Sandler vs. Lazard | Piper Sandler vs. Moelis 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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