Correlation Between Stifel Financial and Bitcoin Depot

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

By analyzing existing cross correlation between Stifel Financial and Bitcoin Depot, you can compare the effects of market volatilities on Stifel Financial and Bitcoin Depot 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 Bitcoin Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Bitcoin Depot.

Diversification Opportunities for Stifel Financial and Bitcoin Depot

0.29

Correlation Coefficient

Stifel Financial  Bitcoin Depot

Modest diversification

The 3 months correlation between Stifel and Bitcoin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot 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 are associated (or correlated) with Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of Stifel Financial i.e., Stifel Financial and Bitcoin Depot go up and down completely randomly.

Pair Corralation between Stifel Financial and Bitcoin Depot

Allowing for the 90-day total investment horizon Stifel Financial is expected to under-perform the Bitcoin Depot. But the stock apears to be less risky and, when comparing its historical volatility, Stifel Financial is 5.99 times less risky than Bitcoin Depot. The stock trades about -0.09 of its potential returns per unit of risk. The Bitcoin Depot is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  8.77  in Bitcoin Depot on November 29, 2024 and sell it today you would lose (1.78) from holding Bitcoin Depot or give up 20.3% of portfolio value over 90 days.

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

Stifel Financial  vs.  Bitcoin Depot

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.

Bitcoin Depot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bitcoin Depot is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Stifel Financial and Bitcoin Depot

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

The idea behind Stifel Financial and Bitcoin Depot 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.