Correlation Between LogicMark and New Pacific

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

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

Diversification Opportunities for LogicMark and New Pacific

0.72

Correlation Coefficient

LogicMark  New Pacific

Poor diversification

The 3 months correlation between LogicMark and New is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding LogicMark and New Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Pacific Metals and LogicMark 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 LogicMark are associated (or correlated) with New Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Pacific Metals has no effect on the direction of LogicMark i.e., LogicMark and New Pacific go up and down completely randomly.

Pair Corralation between LogicMark and New Pacific

Given the investment horizon of 90 days LogicMark is expected to under-perform the New Pacific. In addition to that, LogicMark is 2.8 times more volatile than New Pacific Metals. It trades about -0.65 of its total potential returns per unit of risk. New Pacific Metals is currently generating about -0.07 per unit of volatility. If you would invest  116.00  in New Pacific Metals on November 28, 2024 and sell it today you would lose (8.00) from holding New Pacific Metals or give up 6.9% of portfolio value over 90 days.

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

LogicMark  vs.  New Pacific Metals

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 March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

New Pacific Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days New Pacific Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with LogicMark and New Pacific

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

The idea behind LogicMark and New Pacific Metals 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.