Correlation Between Logan Ridge and Molson Coors

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

Diversification Opportunities for Logan Ridge and Molson Coors

0.73

Correlation Coefficient

Logan Ridge  Molson Coors

Poor diversification

The 3 months correlation between Logan and Molson is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing 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 Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Brewing has no effect on the direction of Logan Ridge i.e., Logan Ridge and Molson Coors go up and down completely randomly.

Pair Corralation between Logan Ridge and Molson Coors

Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 1.33 times more return on investment than Molson Coors. However, Logan Ridge is 1.33 times more volatile than Molson Coors Brewing. It trades about -0.19 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about -0.25 per unit of risk. If you would invest  2,598  in Logan Ridge Finance on September 28, 2024 and sell it today you would lose (121.00) from holding Logan Ridge Finance or give up 4.66% of portfolio value over 90 days.

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

Logan Ridge Finance  vs.  Molson Coors Brewing

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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Molson Coors Brewing

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Brewing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Molson Coors is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Logan Ridge and Molson Coors

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

The idea behind Logan Ridge Finance and Molson Coors Brewing 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.