Correlation Between B Riley and Atlas Corp

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

Diversification Opportunities for B Riley and Atlas Corp

0.15

Correlation Coefficient

B Riley  Atlas Corp

Average diversification

The 3 months correlation between RILYT and Atlas is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial and Atlas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas 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 Atlas Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Corp has no effect on the direction of B Riley i.e., B Riley and Atlas Corp go up and down completely randomly.

Pair Corralation between B Riley and Atlas Corp

Assuming the 90 days horizon B Riley Financial is expected to under-perform the Atlas Corp. In addition to that, B Riley is 14.61 times more volatile than Atlas Corp. It trades about -0.03 of its total potential returns per unit of risk. Atlas Corp is currently generating about 0.07 per unit of volatility. If you would invest  2,513  in Atlas Corp on November 27, 2024 and sell it today you would earn a total of  10.00  from holding Atlas Corp or generate 0.4% return on investment over 90 days.

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

B Riley Financial  vs.  Atlas 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 comparatively stable basic indicators, B Riley is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Atlas Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Atlas Corp 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 Atlas Corp

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

The idea behind B Riley Financial and Atlas 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.