Correlation Between Western Union and Siebert Financial
Can any of the company-specific risk be diversified away by investing in both Western Union and Siebert 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 Western Union and Siebert Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Siebert Financial Corp, you can compare the effects of market volatilities on Western Union and Siebert 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 Western Union with a short position of Siebert Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Siebert Financial.
Diversification Opportunities for Western Union and Siebert Financial
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Siebert is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Siebert Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siebert Financial Corp and Western Union 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 Western Union Co are associated (or correlated) with Siebert Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siebert Financial Corp has no effect on the direction of Western Union i.e., Western Union and Siebert Financial go up and down completely randomly.
Pair Corralation between Western Union and Siebert Financial
Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the Siebert Financial. But the stock apears to be less risky and, when comparing its historical volatility, Western Union Co is 3.29 times less risky than Siebert Financial. The stock trades about -0.07 of its potential returns per unit of risk. The Siebert Financial Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 205.00 in Siebert Financial Corp on September 3, 2024 and sell it today you would earn a total of 82.00 from holding Siebert Financial Corp or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Union Co vs. Siebert Financial Corp
Performance |
| Timeline |
| Western Union |
| Siebert Financial Corp |
Western Union and Siebert Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Siebert Financial
The main advantage of trading using opposite Western Union and Siebert Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Siebert 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 Siebert Financial will offset losses from the drop in Siebert Financial's long position.| Western Union vs. American Express | Western Union vs. Capital One Financial | Western Union vs. Upstart Holdings | Western Union vs. Ally Financial |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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