Correlation Between Stifel Financial and Principal Real
Can any of the company-specific risk be diversified away by investing in both Stifel Financial and Principal Real 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 Principal Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial and Principal Real Estate, you can compare the effects of market volatilities on Stifel Financial and Principal Real 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 Principal Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Principal Real.
Diversification Opportunities for Stifel Financial and Principal Real
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stifel and Principal is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial and Principal Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Real Estate 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 Principal Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Real Estate has no effect on the direction of Stifel Financial i.e., Stifel Financial and Principal Real go up and down completely randomly.
Pair Corralation between Stifel Financial and Principal Real
Allowing for the 90-day total investment horizon Stifel Financial is expected to under-perform the Principal Real. In addition to that, Stifel Financial is 3.11 times more volatile than Principal Real Estate. It trades about -0.25 of its total potential returns per unit of risk. Principal Real Estate is currently generating about 0.46 per unit of volatility. If you would invest 1,013 in Principal Real Estate on December 2, 2024 and sell it today you would earn a total of 51.00 from holding Principal Real Estate or generate 5.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Stifel Financial vs. Principal Real Estate
Performance |
Timeline |
Stifel Financial |
Principal Real Estate |
Stifel Financial and Principal Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stifel Financial and Principal Real
The main advantage of trading using opposite Stifel Financial and Principal Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial position performs unexpectedly, Principal Real 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 Principal Real will offset losses from the drop in Principal Real's long position.Stifel Financial vs. Raymond James Financial | Stifel Financial vs. Evercore Partners | Stifel Financial vs. Selective Insurance Group | Stifel Financial vs. Reinsurance Group of |
Principal Real vs. Eaton Vance National | Principal Real vs. Blackrock Muniholdings Ny | Principal Real vs. Nuveen California Select | Principal Real vs. Invesco Van Kampen |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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