Correlation Between B Riley and Strats Trust

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

Diversification Opportunities for B Riley and Strats Trust

-0.08

Correlation Coefficient

B Riley  Strats Trust

Good diversification

The 3 months correlation between RILYZ and Strats is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial and Strats Trust Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strats Trust Cellular 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 Strats Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strats Trust Cellular has no effect on the direction of B Riley i.e., B Riley and Strats Trust go up and down completely randomly.

Pair Corralation between B Riley and Strats Trust

Assuming the 90 days horizon B Riley Financial is expected to under-perform the Strats Trust. In addition to that, B Riley is 1.16 times more volatile than Strats Trust Cellular. It trades about -0.04 of its total potential returns per unit of risk. Strats Trust Cellular is currently generating about 0.06 per unit of volatility. If you would invest  956.00  in Strats Trust Cellular on September 17, 2024 and sell it today you would earn a total of  20.00  from holding Strats Trust Cellular or generate 2.09% return on investment over 90 days.

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

B Riley Financial  vs.  Strats Trust Cellular

B Riley Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in B Riley Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, B Riley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Strats Trust Cellular

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Strats Trust Cellular are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward-looking indicators, Strats Trust is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with B Riley and Strats Trust

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

The idea behind B Riley Financial and Strats Trust Cellular 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.