Correlation Between Stifel Financial and Mercurity Fintech

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

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

Diversification Opportunities for Stifel Financial and Mercurity Fintech

-0.12

Correlation Coefficient

Stifel Financial  Mercurity Fintech

Good diversification

The 3 months correlation between Stifel and Mercurity is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial Corp and Mercurity Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercurity Fintech Holding and Stifel 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 Stifel Financial Corp are associated (or correlated) with Mercurity Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercurity Fintech Holding has no effect on the direction of Stifel Financial i.e., Stifel Financial and Mercurity Fintech go up and down completely randomly.

Pair Corralation between Stifel Financial and Mercurity Fintech

Assuming the 90 days horizon Stifel Financial Corp is expected to generate 0.1 times more return on investment than Mercurity Fintech. However, Stifel Financial Corp is 9.61 times less risky than Mercurity Fintech. It trades about 0.04 of its potential returns per unit of risk. Mercurity Fintech Holding is currently generating about -0.03 per unit of risk. If you would invest  2,421  in Stifel Financial Corp on December 29, 2024 and sell it today you would earn a total of  30.00  from holding Stifel Financial Corp or generate 1.24% return on investment over 90 days.

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

Stifel Financial Corp  vs.  Mercurity Fintech Holding

Stifel Financial Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stifel Financial Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Stifel Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mercurity Fintech Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mercurity Fintech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Stifel Financial and Mercurity Fintech

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

The idea behind Stifel Financial Corp and Mercurity Fintech Holding 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.