Correlation Between Strats SM and B Riley
Can any of the company-specific risk be diversified away by investing in both Strats SM 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 Strats SM and B Riley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strats SM Trust and B Riley Financial, you can compare the effects of market volatilities on Strats SM 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 Strats SM with a short position of B Riley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strats SM and B Riley.
Diversification Opportunities for Strats SM and B Riley
Average diversification
The 3 months correlation between Strats and RILYZ is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Strats SM Trust 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 Strats SM 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 Strats SM Trust 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 Strats SM i.e., Strats SM and B Riley go up and down completely randomly.
Pair Corralation between Strats SM and B Riley
Considering the 90-day investment horizon Strats SM Trust is expected to generate 0.19 times more return on investment than B Riley. However, Strats SM Trust is 5.39 times less risky than B Riley. It trades about 0.01 of its potential returns per unit of risk. B Riley Financial is currently generating about -0.11 per unit of risk. If you would invest 2,499 in Strats SM Trust on September 15, 2024 and sell it today you would earn a total of 1.00 from holding Strats SM Trust or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strats SM Trust vs. B Riley Financial
Performance |
| Timeline |
| Strats SM Trust |
| B Riley Financial |
Strats SM and B Riley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strats SM and B Riley
The main advantage of trading using opposite Strats SM and B Riley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strats SM 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.| Strats SM vs. B Riley Financial | Strats SM vs. DTE Energy Co | Strats SM vs. Aquagold International | Strats SM vs. Morningstar Unconstrained Allocation |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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