Correlation Between B Riley and Athene Holding

Can any of the company-specific risk be diversified away by investing in both B Riley and Athene Holding 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 Athene Holding 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 Athene Holding, you can compare the effects of market volatilities on B Riley and Athene Holding 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 Athene Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Riley and Athene Holding.

Diversification Opportunities for B Riley and Athene Holding

0.42

Correlation Coefficient

B Riley  Athene Holding

Very weak diversification

The 3 months correlation between RILY and Athene is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial and Athene Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athene Holding 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 Athene Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athene Holding has no effect on the direction of B Riley i.e., B Riley and Athene Holding go up and down completely randomly.

Pair Corralation between B Riley and Athene Holding

Given the investment horizon of 90 days B Riley Financial is expected to under-perform the Athene Holding. In addition to that, B Riley is 11.0 times more volatile than Athene Holding. It trades about -0.03 of its total potential returns per unit of risk. Athene Holding is currently generating about 0.03 per unit of volatility. If you would invest  2,290  in Athene Holding on October 2, 2024 and sell it today you would earn a total of  111.00  from holding Athene Holding or generate 4.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.56%
Values	Daily Returns

B Riley Financial  vs.  Athene Holding

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 fairly strong essential indicators, B Riley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Athene Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athene Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Athene Holding is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with B Riley and Athene Holding

The main advantage of trading using opposite B Riley and Athene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Riley position performs unexpectedly, Athene Holding 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 Athene Holding will offset losses from the drop in Athene Holding's long position.

The idea behind B Riley Financial and Athene Holding 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.