Correlation Between Logan Ridge and GE Vernova

Can any of the company-specific risk be diversified away by investing in both Logan Ridge and GE Vernova 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 GE Vernova 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 GE Vernova LLC, you can compare the effects of market volatilities on Logan Ridge and GE Vernova 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 GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and GE Vernova.

Diversification Opportunities for Logan Ridge and GE Vernova

0.74

Correlation Coefficient

Logan Ridge  GE Vernova

Poor diversification

The 3 months correlation between Logan and GEV is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and GE Vernova LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Vernova LLC 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 GE Vernova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Vernova LLC has no effect on the direction of Logan Ridge i.e., Logan Ridge and GE Vernova go up and down completely randomly.

Pair Corralation between Logan Ridge and GE Vernova

Given the investment horizon of 90 days Logan Ridge Finance is expected to under-perform the GE Vernova. But the stock apears to be less risky and, when comparing its historical volatility, Logan Ridge Finance is 3.06 times less risky than GE Vernova. The stock trades about -0.02 of its potential returns per unit of risk. The GE Vernova LLC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  33,500  in GE Vernova LLC on October 10, 2024 and sell it today you would earn a total of  3,352  from holding GE Vernova LLC or generate 10.01% return on investment over 90 days.

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

Logan Ridge Finance  vs.  GE Vernova LLC

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

GE Vernova LLC

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GE Vernova LLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, GE Vernova showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Logan Ridge and GE Vernova

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

The idea behind Logan Ridge Finance and GE Vernova LLC 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.