Correlation Between Stifel Financial and Alta Global

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

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

Diversification Opportunities for Stifel Financial and Alta Global

0.42

Correlation Coefficient

Stifel Financial  Alta Global

Very weak diversification

The 3 months correlation between Stifel and Alta is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Alta Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Global Group 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 Alta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Global Group has no effect on the direction of Stifel Financial i.e., Stifel Financial and Alta Global go up and down completely randomly.

Pair Corralation between Stifel Financial and Alta Global

Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 0.19 times more return on investment than Alta Global. However, Stifel Financial is 5.21 times less risky than Alta Global. It trades about -0.02 of its potential returns per unit of risk. Alta Global Group is currently generating about -0.16 per unit of risk. If you would invest  11,303  in Stifel Financial on November 20, 2024 and sell it today you would lose (266.00) from holding Stifel Financial or give up 2.35% of portfolio value over 90 days.

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

Stifel Financial  vs.  Alta Global 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 nearly stable technical and fundamental indicators, Stifel Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Alta Global Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alta Global Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Stifel Financial and Alta Global

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

The idea behind Stifel Financial and Alta Global 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.