Correlation Between B Riley and Great Ajax

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

Diversification Opportunities for B Riley and Great Ajax

0.0

Correlation Coefficient

B Riley  Great Ajax

Pay attention - limited upside

The 3 months correlation between RILYO and Great is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial and Great Ajax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Ajax Corp 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 Great Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Ajax Corp has no effect on the direction of B Riley i.e., B Riley and Great Ajax go up and down completely randomly.

Pair Corralation between B Riley and Great Ajax

If you would invest (100.00) in Great Ajax Corp on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Great Ajax Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

B Riley Financial  vs.  Great Ajax Corp

B Riley Financial

Risk-Adjusted Performance

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.

Great Ajax Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with B Riley and Great Ajax

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

The idea behind B Riley Financial and Great Ajax Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..