Correlation Between Broad Capital and Stifel Financial

Can any of the company-specific risk be diversified away by investing in both Broad Capital 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 Broad Capital and Stifel Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Broad Capital Acquisition and Stifel Financial, you can compare the effects of market volatilities on Broad Capital 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 Broad Capital with a short position of Stifel Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broad Capital and Stifel Financial.

Diversification Opportunities for Broad Capital and Stifel Financial

0.0

Correlation Coefficient

Broad Capital  Stifel Financial

Pay attention - limited upside

The 3 months correlation between Broad and Stifel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial and Broad Capital 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 Broad Capital Acquisition 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 Broad Capital i.e., Broad Capital and Stifel Financial go up and down completely randomly.

Pair Corralation between Broad Capital and Stifel Financial

If you would invest (100.00) in Broad Capital Acquisition on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Broad Capital Acquisition or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Broad Capital Acquisition  vs.  Stifel Financial

Broad Capital Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Broad Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Broad Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Stifel Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stifel Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Broad Capital and Stifel Financial

The main advantage of trading using opposite Broad Capital and Stifel Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broad Capital 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.

The idea behind Broad Capital Acquisition and Stifel Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.