Correlation Between Allegion PLC and LogicMark

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

By analyzing existing cross correlation between Allegion PLC and LogicMark, you can compare the effects of market volatilities on Allegion PLC and LogicMark 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 Allegion PLC with a short position of LogicMark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegion PLC and LogicMark.

Diversification Opportunities for Allegion PLC and LogicMark

0.5

Correlation Coefficient

Allegion PLC  LogicMark

Very weak diversification

The 3 months correlation between Allegion and LogicMark is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Allegion PLC and LogicMark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LogicMark and Allegion PLC 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 Allegion PLC are associated (or correlated) with LogicMark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LogicMark has no effect on the direction of Allegion PLC i.e., Allegion PLC and LogicMark go up and down completely randomly.

Pair Corralation between Allegion PLC and LogicMark

Given the investment horizon of 90 days Allegion PLC is expected to generate 0.13 times more return on investment than LogicMark. However, Allegion PLC is 7.45 times less risky than LogicMark. It trades about -0.01 of its potential returns per unit of risk. LogicMark is currently generating about -0.47 per unit of risk. If you would invest  13,044  in Allegion PLC on December 30, 2024 and sell it today you would lose (215.00) from holding Allegion PLC or give up 1.65% of portfolio value over 90 days.

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

Allegion PLC  vs.  LogicMark

Allegion PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allegion PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Allegion PLC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

LogicMark

Risk-Adjusted Performance

Very Weak

Over the last 90 days LogicMark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Allegion PLC and LogicMark

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

The idea behind Allegion PLC and LogicMark 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.