Correlation Between Unum and Stifel Financial
Can any of the company-specific risk be diversified away by investing in both Unum and Stifel Financial 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 Unum and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unum Group and Stifel Financial, you can compare the effects of market volatilities on Unum and Stifel Financial 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 Unum with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unum and Stifel Financial.
Diversification Opportunities for Unum and Stifel Financial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Unum and Stifel is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Unum Group and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial and Unum 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 Unum Group are associated (or correlated) with Stifel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stifel Financial has no effect on the direction of Unum i.e., Unum and Stifel Financial go up and down completely randomly.
Pair Corralation between Unum and Stifel Financial
Given the investment horizon of 90 days Unum is expected to generate 1.11 times less return on investment than Stifel Financial. But when comparing it to its historical volatility, Unum Group is 1.82 times less risky than Stifel Financial. It trades about 0.03 of its potential returns per unit of risk. Stifel Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unum Group vs. Stifel Financial
Performance |
| Timeline |
| Unum Group |
| Stifel Financial |
Unum and Stifel Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unum and Stifel Financial
The main advantage of trading using opposite Unum and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unum position performs unexpectedly, Stifel Financial 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 Stifel Financial will offset losses from the drop in Stifel Financial's long position.| Unum vs. AKITA Drilling | Unum vs. Nabors Industries | Unum vs. Getty Images Holdings | Unum vs. Precision Drilling |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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