Correlation Between B Riley and Eaton Vance

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

Diversification Opportunities for B Riley and Eaton Vance

-0.66

Correlation Coefficient

B Riley  Eaton Vance

Excellent diversification

The 3 months correlation between RILYG and Eaton is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial and Eaton Vance Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Short 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Short has no effect on the direction of B Riley i.e., B Riley and Eaton Vance go up and down completely randomly.

Pair Corralation between B Riley and Eaton Vance

Assuming the 90 days horizon B Riley Financial is expected to under-perform the Eaton Vance. In addition to that, B Riley is 39.81 times more volatile than Eaton Vance Short. It trades about -0.06 of its total potential returns per unit of risk. Eaton Vance Short is currently generating about 0.17 per unit of volatility. If you would invest  651.00  in Eaton Vance Short on July 10, 2024 and sell it today you would earn a total of  15.00  from holding Eaton Vance Short or generate 2.3% return on investment over 90 days.

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

B Riley Financial  vs.  Eaton Vance Short

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. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in November 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Eaton Vance Short

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Short are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Eaton Vance 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 Eaton Vance

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

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