Correlation Between Jefferies Financial and Perella Weinberg

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

By analyzing existing cross correlation between Jefferies Financial Group and Perella Weinberg Partners, you can compare the effects of market volatilities on Jefferies Financial and Perella Weinberg 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 Jefferies Financial with a short position of Perella Weinberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Perella Weinberg.

Diversification Opportunities for Jefferies Financial and Perella Weinberg

0.88

Correlation Coefficient

Jefferies Financial  Perella Weinberg

Very poor diversification

The 3 months correlation between Jefferies and Perella is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Perella Weinberg Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perella Weinberg Partners and Jefferies Financial 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 Jefferies Financial Group are associated (or correlated) with Perella Weinberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perella Weinberg Partners has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and Perella Weinberg go up and down completely randomly.

Pair Corralation between Jefferies Financial and Perella Weinberg

Considering the 90-day investment horizon Jefferies Financial Group is expected to under-perform the Perella Weinberg. But the stock apears to be less risky and, when comparing its historical volatility, Jefferies Financial Group is 1.04 times less risky than Perella Weinberg. The stock trades about -0.22 of its potential returns per unit of risk. The Perella Weinberg Partners is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  2,359  in Perella Weinberg Partners on December 29, 2024 and sell it today you would lose (514.00) from holding Perella Weinberg Partners or give up 21.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Jefferies Financial Group  vs.  Perella Weinberg Partners

Jefferies Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jefferies Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Perella Weinberg Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perella Weinberg Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Jefferies Financial and Perella Weinberg

The main advantage of trading using opposite Jefferies Financial and Perella Weinberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial position performs unexpectedly, Perella Weinberg 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 Perella Weinberg will offset losses from the drop in Perella Weinberg's long position.

The idea behind Jefferies Financial Group and Perella Weinberg Partners 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.