Correlation Between B Riley and Conifer Holdings

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

Diversification Opportunities for B Riley and Conifer Holdings

0.31

Correlation Coefficient

B Riley  Conifer Holdings

Weak diversification

The 3 months correlation between RILYN and Conifer is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial and Conifer Holdings Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifer Holdings Senior 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 Conifer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conifer Holdings Senior has no effect on the direction of B Riley i.e., B Riley and Conifer Holdings go up and down completely randomly.

Pair Corralation between B Riley and Conifer Holdings

Assuming the 90 days horizon B Riley Financial is expected to generate 2.46 times more return on investment than Conifer Holdings. However, B Riley is 2.46 times more volatile than Conifer Holdings Senior. It trades about 0.0 of its potential returns per unit of risk. Conifer Holdings Senior is currently generating about 0.0 per unit of risk. If you would invest  1,852  in B Riley Financial on September 28, 2024 and sell it today you would lose (644.50) from holding B Riley Financial or give up 34.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	27.42%
Values	Daily Returns

B Riley Financial  vs.  Conifer Holdings Senior

B Riley Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in B Riley Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, B Riley may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Conifer Holdings Senior

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conifer Holdings Senior has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Conifer Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with B Riley and Conifer Holdings

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

The idea behind B Riley Financial and Conifer Holdings Senior 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.