Correlation Between Logan Ridge and Suntory Beverage

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

Diversification Opportunities for Logan Ridge and Suntory Beverage

-0.03

Correlation Coefficient

Logan Ridge  Suntory Beverage

Good diversification

The 3 months correlation between Logan and Suntory is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food 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 Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of Logan Ridge i.e., Logan Ridge and Suntory Beverage go up and down completely randomly.

Pair Corralation between Logan Ridge and Suntory Beverage

Given the investment horizon of 90 days Logan Ridge Finance is expected to under-perform the Suntory Beverage. In addition to that, Logan Ridge is 1.18 times more volatile than Suntory Beverage Food. It trades about -0.12 of its total potential returns per unit of risk. Suntory Beverage Food is currently generating about 0.05 per unit of volatility. If you would invest  1,614  in Suntory Beverage Food on December 22, 2024 and sell it today you would earn a total of  48.00  from holding Suntory Beverage Food or generate 2.97% 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.  Suntory Beverage Food

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.

Suntory Beverage Food

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Suntory Beverage Food are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Suntory Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Logan Ridge and Suntory Beverage

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

The idea behind Logan Ridge Finance and Suntory Beverage Food 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.