Correlation Between Stifel Financial and Jefferies Financial

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

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

Diversification Opportunities for Stifel Financial and Jefferies Financial

0.8

Correlation Coefficient

Stifel Financial  Jefferies Financial

Very poor diversification

The 3 months correlation between Stifel and Jefferies is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Stifel Financial i.e., Stifel Financial and Jefferies Financial go up and down completely randomly.

Pair Corralation between Stifel Financial and Jefferies Financial

Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 0.68 times more return on investment than Jefferies Financial. However, Stifel Financial is 1.46 times less risky than Jefferies Financial. It trades about -0.06 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about -0.22 per unit of risk. If you would invest  10,569  in Stifel Financial on December 29, 2024 and sell it today you would lose (862.00) from holding Stifel Financial or give up 8.16% of portfolio value over 90 days.

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

Stifel Financial  vs.  Jefferies Financial Group

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.

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.

Pair Trading with Stifel Financial and Jefferies Financial

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

The idea behind Stifel Financial and Jefferies Financial Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.