Correlation Between Top KingWin and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both Top KingWin 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 Top KingWin and Jefferies Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top KingWin and Jefferies Financial Group, you can compare the effects of market volatilities on Top KingWin 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 Top KingWin with a short position of Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top KingWin and Jefferies Financial.
Diversification Opportunities for Top KingWin and Jefferies Financial
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Top and Jefferies is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Top KingWin and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial and Top KingWin 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 Top KingWin 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 Top KingWin i.e., Top KingWin and Jefferies Financial go up and down completely randomly.
Pair Corralation between Top KingWin and Jefferies Financial
Considering the 90-day investment horizon Top KingWin is expected to under-perform the Jefferies Financial. In addition to that, Top KingWin is 2.07 times more volatile than Jefferies Financial Group. It trades about -0.33 of its total potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.36 per unit of volatility. If you would invest 6,463 in Jefferies Financial Group on August 27, 2024 and sell it today you would earn a total of 1,395 from holding Jefferies Financial Group or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top KingWin vs. Jefferies Financial Group
Performance |
| Timeline |
| Top KingWin |
| Jefferies Financial |
Top KingWin and Jefferies Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top KingWin and Jefferies Financial
The main advantage of trading using opposite Top KingWin and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top KingWin 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.| Top KingWin vs. Goldman Sachs Group | Top KingWin vs. Moelis Co | Top KingWin vs. Morgan Stanley | Top KingWin vs. Stifel Financial |
| Jefferies Financial vs. Lazard | Jefferies Financial vs. PJT Partners | Jefferies Financial vs. Moelis Co | Jefferies Financial vs. Houlihan Lokey |
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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