Correlation Between Logan Ridge and Powerof Canada

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

Diversification Opportunities for Logan Ridge and Powerof Canada

-0.27

Correlation Coefficient

Logan Ridge  Powerof Canada

Very good diversification

The 3 months correlation between Logan and Powerof is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Power of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerof Canada 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 Powerof Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerof Canada has no effect on the direction of Logan Ridge i.e., Logan Ridge and Powerof Canada go up and down completely randomly.

Pair Corralation between Logan Ridge and Powerof Canada

Given the investment horizon of 90 days Logan Ridge Finance is expected to under-perform the Powerof Canada. In addition to that, Logan Ridge is 1.02 times more volatile than Power of. It trades about -0.12 of its total potential returns per unit of risk. Power of is currently generating about 0.15 per unit of volatility. If you would invest  3,153  in Power of on December 29, 2024 and sell it today you would earn a total of  418.00  from holding Power of or generate 13.26% return on investment over 90 days.

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

Logan Ridge Finance  vs.  Power of

Logan Ridge Finance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Logan Ridge Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Powerof Canada

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Power of are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Powerof Canada reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Logan Ridge and Powerof Canada

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

The idea behind Logan Ridge Finance and Power of 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.