Correlation Between TravelCenters and B Riley

Can any of the company-specific risk be diversified away by investing in both TravelCenters and B Riley 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 TravelCenters and B Riley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TravelCenters Of America and B Riley Financial, you can compare the effects of market volatilities on TravelCenters and B Riley 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 TravelCenters with a short position of B Riley. Check out your portfolio center. Please also check ongoing floating volatility patterns of TravelCenters and B Riley.

Diversification Opportunities for TravelCenters and B Riley

0.33

Correlation Coefficient

TravelCenters  B Riley

Weak diversification

The 3 months correlation between TravelCenters and RILYG is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding TravelCenters Of America and B Riley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Riley Financial and TravelCenters 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 TravelCenters Of America are associated (or correlated) with B Riley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Riley Financial has no effect on the direction of TravelCenters i.e., TravelCenters and B Riley go up and down completely randomly.

Pair Corralation between TravelCenters and B Riley

If you would invest  1,292  in B Riley Financial on September 17, 2024 and sell it today you would lose (42.00) from holding B Riley Financial or give up 3.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

TravelCenters Of America  vs.  B Riley Financial

TravelCenters Of America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TravelCenters Of America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, TravelCenters is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

B Riley Financial

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days B Riley Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, B Riley is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TravelCenters and B Riley

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

The idea behind TravelCenters Of America and B Riley Financial 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 Anywhere module to track or share privately all of your investments from the convenience of any device.