Correlation Between United States and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both United States and Jefferies 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 United States and Jefferies Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Jefferies Financial Group, you can compare the effects of market volatilities on United States and Jefferies 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 United States with a short position of Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Jefferies Financial.
Diversification Opportunities for United States and Jefferies Financial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Jefferies is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial and United States 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 United States Steel are associated (or correlated) with Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of United States i.e., United States and Jefferies Financial go up and down completely randomly.
Pair Corralation between United States and Jefferies Financial
Assuming the 90 days trading horizon United States is expected to generate 1.4 times less return on investment than Jefferies Financial. In addition to that, United States is 1.32 times more volatile than Jefferies Financial Group. It trades about 0.04 of its total potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.08 per unit of volatility. If you would invest 19,237 in Jefferies Financial Group on October 30, 2024 and sell it today you would earn a total of 24,838 from holding Jefferies Financial Group or generate 129.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.65% |
| Values | Daily Returns |
United States Steel vs. Jefferies Financial Group
Performance |
| Timeline |
| United States Steel |
| Jefferies Financial |
United States and Jefferies Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Jefferies Financial
The main advantage of trading using opposite United States and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Jefferies 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.| United States vs. Liberty Broadband | United States vs. CRISPR Therapeutics AG | United States vs. Arrow Electronics, | United States vs. Autohome |
| Jefferies Financial vs. Bank of America | Jefferies Financial vs. Truist Financial | Jefferies Financial vs. HCA Healthcare, | Jefferies Financial vs. Omega Healthcare Investors, |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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