Correlation Between Stifel Financial and Ryman Hospitality

Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Ryman Hospitality 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 Ryman Hospitality 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 Ryman Hospitality Properties, you can compare the effects of market volatilities on Stifel Financial and Ryman Hospitality 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 Ryman Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Ryman Hospitality.

Diversification Opportunities for Stifel Financial and Ryman Hospitality

-0.37

Correlation Coefficient

Stifel Financial  Ryman Hospitality

Very good diversification

The 3 months correlation between Stifel and Ryman is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial Corp and Ryman Hospitality Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Hospitality 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 Ryman Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Hospitality has no effect on the direction of Stifel Financial i.e., Stifel Financial and Ryman Hospitality go up and down completely randomly.

Pair Corralation between Stifel Financial and Ryman Hospitality

Assuming the 90 days horizon Stifel Financial Corp is expected to under-perform the Ryman Hospitality. But the preferred stock apears to be less risky and, when comparing its historical volatility, Stifel Financial Corp is 1.81 times less risky than Ryman Hospitality. The preferred stock trades about -0.09 of its potential returns per unit of risk. The Ryman Hospitality Properties is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  9,998  in Ryman Hospitality Properties on September 15, 2024 and sell it today you would earn a total of  1,326  from holding Ryman Hospitality Properties or generate 13.26% 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.  Ryman Hospitality Properties

Stifel Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stifel Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Stifel Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Ryman Hospitality

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ryman Hospitality Properties are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish technical indicators, Ryman Hospitality reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stifel Financial and Ryman Hospitality

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

The idea behind Stifel Financial Corp and Ryman Hospitality Properties 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.