Correlation Between Logan Ridge and Hewlett Packard

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

Diversification Opportunities for Logan Ridge and Hewlett Packard

0.36

Correlation Coefficient

Logan Ridge  Hewlett Packard

Weak diversification

The 3 months correlation between Logan and Hewlett is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Hewlett Packard Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hewlett Packard Ente 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 Hewlett Packard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hewlett Packard Ente has no effect on the direction of Logan Ridge i.e., Logan Ridge and Hewlett Packard go up and down completely randomly.

Pair Corralation between Logan Ridge and Hewlett Packard

Given the investment horizon of 90 days Logan Ridge is expected to generate 5.88 times less return on investment than Hewlett Packard. But when comparing it to its historical volatility, Logan Ridge Finance is 1.78 times less risky than Hewlett Packard. It trades about 0.04 of its potential returns per unit of risk. Hewlett Packard Enterprise is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5,127  in Hewlett Packard Enterprise on October 11, 2024 and sell it today you would earn a total of  1,209  from holding Hewlett Packard Enterprise or generate 23.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	16.77%
Values	Daily Returns

Logan Ridge Finance  vs.  Hewlett Packard Enterprise

Logan Ridge Finance

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 1 (%) 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.

Hewlett Packard Ente

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hewlett Packard Enterprise 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, Hewlett Packard is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Logan Ridge and Hewlett Packard

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

The idea behind Logan Ridge Finance and Hewlett Packard Enterprise 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.