Correlation Between Logan Ridge and Blackrock Muniyield

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

Diversification Opportunities for Logan Ridge and Blackrock Muniyield

-0.34

Correlation Coefficient

Logan Ridge  Blackrock Muniyield

Very good diversification

The 3 months correlation between Logan and Blackrock is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Blackrock Muniyield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield 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 Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of Logan Ridge i.e., Logan Ridge and Blackrock Muniyield go up and down completely randomly.

Pair Corralation between Logan Ridge and Blackrock Muniyield

Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 2.07 times more return on investment than Blackrock Muniyield. However, Logan Ridge is 2.07 times more volatile than Blackrock Muniyield. It trades about 0.09 of its potential returns per unit of risk. Blackrock Muniyield is currently generating about -0.02 per unit of risk. If you would invest  2,345  in Logan Ridge Finance on September 13, 2024 and sell it today you would earn a total of  180.00  from holding Logan Ridge Finance or generate 7.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Logan Ridge Finance  vs.  Blackrock Muniyield

Logan Ridge Finance

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 7 (%) 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.

Blackrock Muniyield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muniyield has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Blackrock Muniyield is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Logan Ridge and Blackrock Muniyield

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

The idea behind Logan Ridge Finance and Blackrock Muniyield 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.