Correlation Between DTE Energy and B Riley
Can any of the company-specific risk be diversified away by investing in both DTE Energy and B Riley 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 DTE Energy and B Riley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTE Energy Co and B Riley Financial, you can compare the effects of market volatilities on DTE Energy and B Riley 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 DTE Energy with a short position of B Riley. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTE Energy and B Riley.
Diversification Opportunities for DTE Energy and B Riley
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DTE and RILYZ is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding DTE Energy Co and B Riley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Riley Financial and DTE Energy 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 DTE Energy Co are associated (or correlated) with B Riley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Riley Financial has no effect on the direction of DTE Energy i.e., DTE Energy and B Riley go up and down completely randomly.
Pair Corralation between DTE Energy and B Riley
Considering the 90-day investment horizon DTE Energy Co is expected to generate 0.11 times more return on investment than B Riley. However, DTE Energy Co is 9.06 times less risky than B Riley. It trades about 0.07 of its potential returns per unit of risk. B Riley Financial is currently generating about -0.02 per unit of risk. If you would invest 2,202 in DTE Energy Co on August 28, 2024 and sell it today you would earn a total of 128.00 from holding DTE Energy Co or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DTE Energy Co vs. B Riley Financial
Performance |
| Timeline |
| DTE Energy |
| B Riley Financial |
DTE Energy and B Riley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTE Energy and B Riley
The main advantage of trading using opposite DTE Energy and B Riley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTE Energy position performs unexpectedly, B Riley 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 B Riley will offset losses from the drop in B Riley's long position.| DTE Energy vs. CMS Energy Corp | DTE Energy vs. American Financial Group | DTE Energy vs. Argo Group 65 | DTE Energy vs. Aegon Funding |
| B Riley vs. B Riley Financial | B Riley vs. B Riley Financial | B Riley vs. B Riley Financial, | B Riley vs. B Riley Financial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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