Correlation Between Logan Ridge and GAMCO Global

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

Diversification Opportunities for Logan Ridge and GAMCO Global

-0.76

Correlation Coefficient

Logan Ridge  GAMCO Global

Pay attention - limited upside

The 3 months correlation between Logan and GAMCO is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and GAMCO Global Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMCO Global Gold 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 GAMCO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMCO Global Gold has no effect on the direction of Logan Ridge i.e., Logan Ridge and GAMCO Global go up and down completely randomly.

Pair Corralation between Logan Ridge and GAMCO Global

Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 1.25 times more return on investment than GAMCO Global. However, Logan Ridge is 1.25 times more volatile than GAMCO Global Gold. It trades about 0.09 of its potential returns per unit of risk. GAMCO Global Gold is currently generating about -0.15 per unit of risk. If you would invest  2,372  in Logan Ridge Finance on September 17, 2024 and sell it today you would earn a total of  168.00  from holding Logan Ridge Finance or generate 7.08% return on investment over 90 days.

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

Logan Ridge Finance  vs.  GAMCO Global Gold

Logan Ridge Finance

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Logan Ridge may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GAMCO Global Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMCO Global Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Logan Ridge and GAMCO Global

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

The idea behind Logan Ridge Finance and GAMCO Global Gold 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.