Correlation Between Stifel Financial and Affiliated Managers

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

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

Diversification Opportunities for Stifel Financial and Affiliated Managers

-0.34

Correlation Coefficient

Stifel Financial  Affiliated Managers

Very good diversification

The 3 months correlation between Stifel and Affiliated is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Affiliated Managers Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers 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 Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Stifel Financial i.e., Stifel Financial and Affiliated Managers go up and down completely randomly.

Pair Corralation between Stifel Financial and Affiliated Managers

Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 1.61 times more return on investment than Affiliated Managers. However, Stifel Financial is 1.61 times more volatile than Affiliated Managers Group,. It trades about 0.17 of its potential returns per unit of risk. Affiliated Managers Group, is currently generating about 0.08 per unit of risk. If you would invest  6,231  in Stifel Financial on September 2, 2024 and sell it today you would earn a total of  5,349  from holding Stifel Financial or generate 85.84% return on investment over 90 days.

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

Stifel Financial  vs.  Affiliated Managers Group,

Stifel Financial

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stifel Financial are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Stifel Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Affiliated Managers

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Managers Group, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Affiliated Managers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stifel Financial and Affiliated Managers

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

The idea behind Stifel Financial and Affiliated Managers 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.