Correlation Between Logility and Daily Journal

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

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

Diversification Opportunities for Logility and Daily Journal

0.59

Correlation Coefficient

Logility  Daily Journal

Very weak diversification

The 3 months correlation between Logility and Daily is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Logility and Daily Journal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daily Journal Corp and Logility 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 Logility are associated (or correlated) with Daily Journal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daily Journal Corp has no effect on the direction of Logility i.e., Logility and Daily Journal go up and down completely randomly.

Pair Corralation between Logility and Daily Journal

Given the investment horizon of 90 days Logility is expected to generate 2.02 times more return on investment than Daily Journal. However, Logility is 2.02 times more volatile than Daily Journal Corp. It trades about -0.02 of its potential returns per unit of risk. Daily Journal Corp is currently generating about -0.05 per unit of risk. If you would invest  1,108  in Logility on September 21, 2024 and sell it today you would lose (40.00) from holding Logility or give up 3.61% of portfolio value over 90 days.

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

Logility  vs.  Daily Journal Corp

Logility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Logility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Logility is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Daily Journal Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Daily Journal displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Logility and Daily Journal

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

The idea behind Logility and Daily Journal Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.