Correlation Between Global Hemp and B Riley

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

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

Diversification Opportunities for Global Hemp and B Riley

-0.44

Correlation Coefficient

Global Hemp  B Riley

Very good diversification

The 3 months correlation between Global and RILYO is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Global Hemp Group 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 Global Hemp 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 Global Hemp Group 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 Global Hemp i.e., Global Hemp and B Riley go up and down completely randomly.

Pair Corralation between Global Hemp and B Riley

Assuming the 90 days horizon Global Hemp Group is expected to generate 85.51 times more return on investment than B Riley. However, Global Hemp is 85.51 times more volatile than B Riley Financial. It trades about 0.13 of its potential returns per unit of risk. B Riley Financial is currently generating about 0.11 per unit of risk. If you would invest  0.50  in Global Hemp Group on October 5, 2024 and sell it today you would earn a total of  0.50  from holding Global Hemp Group or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	20.04%
Values	Daily Returns

Global Hemp Group  vs.  B Riley Financial

Global Hemp Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Hemp Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Global Hemp reported solid returns over the last few months and may actually be approaching a breakup point.

B Riley Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days B Riley Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, B Riley is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Global Hemp and B Riley

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

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.