Correlation Between B Riley and First Internet
Can any of the company-specific risk be diversified away by investing in both B Riley and First Internet 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 B Riley and First Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Riley Financial, and First Internet Bancorp, you can compare the effects of market volatilities on B Riley and First Internet 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 B Riley with a short position of First Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Riley and First Internet.
Diversification Opportunities for B Riley and First Internet
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RILYM and First is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial, and First Internet Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Internet Bancorp and B Riley 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 B Riley Financial, are associated (or correlated) with First Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Internet Bancorp has no effect on the direction of B Riley i.e., B Riley and First Internet go up and down completely randomly.
Pair Corralation between B Riley and First Internet
Assuming the 90 days horizon B Riley Financial, is expected to under-perform the First Internet. In addition to that, B Riley is 4.25 times more volatile than First Internet Bancorp. It trades about -0.02 of its total potential returns per unit of risk. First Internet Bancorp is currently generating about 0.19 per unit of volatility. If you would invest 2,481 in First Internet Bancorp on August 27, 2024 and sell it today you would earn a total of 40.00 from holding First Internet Bancorp or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Riley Financial, vs. First Internet Bancorp
Performance |
| Timeline |
| B Riley Financial, |
| First Internet Bancorp |
B Riley and First Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Riley and First Internet
The main advantage of trading using opposite B Riley and First Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Riley position performs unexpectedly, First Internet 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 First Internet will offset losses from the drop in First Internet's long position.| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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