Correlation Between SEALSQ Corp and Logan Ridge

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

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

Diversification Opportunities for SEALSQ Corp and Logan Ridge

0.27

Correlation Coefficient

SEALSQ Corp  Logan Ridge

Modest diversification

The 3 months correlation between SEALSQ and Logan is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SEALSQ Corp and Logan Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logan Ridge Finance and SEALSQ Corp 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 SEALSQ Corp are associated (or correlated) with Logan Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logan Ridge Finance has no effect on the direction of SEALSQ Corp i.e., SEALSQ Corp and Logan Ridge go up and down completely randomly.

Pair Corralation between SEALSQ Corp and Logan Ridge

Given the investment horizon of 90 days SEALSQ Corp is expected to generate 15.54 times more return on investment than Logan Ridge. However, SEALSQ Corp is 15.54 times more volatile than Logan Ridge Finance. It trades about 0.2 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.05 per unit of risk. If you would invest  44.00  in SEALSQ Corp on September 21, 2024 and sell it today you would earn a total of  157.00  from holding SEALSQ Corp or generate 356.82% return on investment over 90 days.

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

SEALSQ Corp  vs.  Logan Ridge Finance

SEALSQ Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SEALSQ Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, SEALSQ Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Logan Ridge Finance

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Logan Ridge is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SEALSQ Corp and Logan Ridge

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

The idea behind SEALSQ Corp and Logan Ridge Finance 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.