Correlation Between Maiden Holdings and B Riley
Can any of the company-specific risk be diversified away by investing in both Maiden Holdings 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 Maiden Holdings and B Riley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings North and B Riley Financial, you can compare the effects of market volatilities on Maiden Holdings 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 Maiden Holdings with a short position of B Riley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and B Riley.
Diversification Opportunities for Maiden Holdings and B Riley
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Maiden and RILYZ is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings North 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 Maiden Holdings 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 Maiden Holdings North 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 Maiden Holdings i.e., Maiden Holdings and B Riley go up and down completely randomly.
Pair Corralation between Maiden Holdings and B Riley
Given the investment horizon of 90 days Maiden Holdings North is expected to under-perform the B Riley. But the stock apears to be less risky and, when comparing its historical volatility, Maiden Holdings North is 1.3 times less risky than B Riley. The stock trades about -0.31 of its potential returns per unit of risk. The B Riley Financial is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,022 in B Riley Financial on September 12, 2024 and sell it today you would lose (15.00) from holding B Riley Financial or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maiden Holdings North vs. B Riley Financial
Performance |
| Timeline |
| Maiden Holdings North |
| B Riley Financial |
Maiden Holdings and B Riley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and B Riley
The main advantage of trading using opposite Maiden Holdings and B Riley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden Holdings 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.| Maiden Holdings vs. Maiden Holdings | Maiden Holdings vs. Affiliated Managers Group | Maiden Holdings vs. Entergy New Orleans | Maiden Holdings vs. American Financial Group |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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