Correlation Between B Riley and Newtek Business
Can any of the company-specific risk be diversified away by investing in both B Riley and Newtek Business 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 Newtek Business 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 Newtek Business Services, you can compare the effects of market volatilities on B Riley and Newtek Business 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 Newtek Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Riley and Newtek Business.
Diversification Opportunities for B Riley and Newtek Business
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RILYO and Newtek is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial and Newtek Business Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newtek Business Services 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 Newtek Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newtek Business Services has no effect on the direction of B Riley i.e., B Riley and Newtek Business go up and down completely randomly.
Pair Corralation between B Riley and Newtek Business
If you would invest (100.00) in Newtek Business Services on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Newtek Business Services or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
B Riley Financial vs. Newtek Business Services
Performance |
| Timeline |
| B Riley Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Newtek Business Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
B Riley and Newtek Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Riley and Newtek Business
The main advantage of trading using opposite B Riley and Newtek Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Riley position performs unexpectedly, Newtek Business 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 Newtek Business will offset losses from the drop in Newtek Business' 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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