Correlation Between Logan Ridge and Badger Infrastructure

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

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

Diversification Opportunities for Logan Ridge and Badger Infrastructure

0.02

Correlation Coefficient

Logan Ridge  Badger Infrastructure

Significant diversification

The 3 months correlation between Logan and Badger is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Badger Infrastructure Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Infrastructure and Logan Ridge 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 Logan Ridge Finance are associated (or correlated) with Badger Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Infrastructure has no effect on the direction of Logan Ridge i.e., Logan Ridge and Badger Infrastructure go up and down completely randomly.

Pair Corralation between Logan Ridge and Badger Infrastructure

Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 0.79 times more return on investment than Badger Infrastructure. However, Logan Ridge Finance is 1.27 times less risky than Badger Infrastructure. It trades about 0.14 of its potential returns per unit of risk. Badger Infrastructure Solutions is currently generating about 0.05 per unit of risk. If you would invest  2,120  in Logan Ridge Finance on September 12, 2024 and sell it today you would earn a total of  355.00  from holding Logan Ridge Finance or generate 16.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Logan Ridge Finance  vs.  Badger Infrastructure Solution

Logan Ridge Finance

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Logan Ridge exhibited solid returns over the last few months and may actually be approaching a breakup point.

Badger Infrastructure

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Badger Infrastructure Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Badger Infrastructure may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Logan Ridge and Badger Infrastructure

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

The idea behind Logan Ridge Finance and Badger Infrastructure Solutions 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.