Correlation Between B Riley and Lendingtree
Can any of the company-specific risk be diversified away by investing in both B Riley and Lendingtree 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 Lendingtree 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 Lendingtree, you can compare the effects of market volatilities on B Riley and Lendingtree 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 Lendingtree. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Riley and Lendingtree.
Diversification Opportunities for B Riley and Lendingtree
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RILYP and Lendingtree is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial and Lendingtree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendingtree 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 Lendingtree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendingtree has no effect on the direction of B Riley i.e., B Riley and Lendingtree go up and down completely randomly.
Pair Corralation between B Riley and Lendingtree
Assuming the 90 days horizon B Riley Financial is expected to under-perform the Lendingtree. In addition to that, B Riley is 1.38 times more volatile than Lendingtree. It trades about -0.18 of its total potential returns per unit of risk. Lendingtree is currently generating about 0.17 per unit of volatility. If you would invest 3,999 in Lendingtree on November 4, 2024 and sell it today you would earn a total of 715.00 from holding Lendingtree or generate 17.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
B Riley Financial vs. Lendingtree
Performance |
| Timeline |
| B Riley Financial |
| Lendingtree |
B Riley and Lendingtree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with B Riley and Lendingtree
The main advantage of trading using opposite B Riley and Lendingtree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Riley position performs unexpectedly, Lendingtree 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 Lendingtree will offset losses from the drop in Lendingtree'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, |
| Lendingtree vs. Voya Financial | Lendingtree vs. B Riley Financial | Lendingtree vs. Voya Financial | Lendingtree 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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