Correlation Between Chicken Soup and B Riley

Can any of the company-specific risk be diversified away by investing in both Chicken Soup 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 Chicken Soup and B Riley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chicken Soup For and B Riley Financial, you can compare the effects of market volatilities on Chicken Soup 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 Chicken Soup with a short position of B Riley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicken Soup and B Riley.

Diversification Opportunities for Chicken Soup and B Riley

0.47

Correlation Coefficient

Chicken Soup  B Riley

Very weak diversification

The 3 months correlation between Chicken and RILYZ is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Chicken Soup For 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 Chicken Soup 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 Chicken Soup For 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 Chicken Soup i.e., Chicken Soup and B Riley go up and down completely randomly.

Pair Corralation between Chicken Soup and B Riley

Assuming the 90 days horizon Chicken Soup For is expected to under-perform the B Riley. In addition to that, Chicken Soup is 1.91 times more volatile than B Riley Financial. It trades about -0.1 of its total potential returns per unit of risk. B Riley Financial is currently generating about -0.02 per unit of volatility. If you would invest  1,768  in B Riley Financial on September 27, 2024 and sell it today you would lose (883.00) from holding B Riley Financial or give up 49.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	74.42%
Values	Daily Returns

Chicken Soup For  vs.  B Riley Financial

Chicken Soup For

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chicken Soup For has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Chicken Soup is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

B Riley Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in B Riley Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, B Riley showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chicken Soup and B Riley

The main advantage of trading using opposite Chicken Soup and B Riley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicken Soup 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.

The idea behind Chicken Soup For and B Riley Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.