Correlation Between Logan Ridge and PFIZER

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

Diversification Opportunities for Logan Ridge and PFIZER

-0.35

Correlation Coefficient

Logan Ridge  PFIZER

Very good diversification

The 3 months correlation between Logan and PFIZER is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and PFIZER INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PFIZER INC 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 PFIZER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PFIZER INC has no effect on the direction of Logan Ridge i.e., Logan Ridge and PFIZER go up and down completely randomly.

Pair Corralation between Logan Ridge and PFIZER

Given the investment horizon of 90 days Logan Ridge Finance is expected to under-perform the PFIZER. In addition to that, Logan Ridge is 1.42 times more volatile than PFIZER INC. It trades about -0.04 of its total potential returns per unit of risk. PFIZER INC is currently generating about 0.17 per unit of volatility. If you would invest  9,592  in PFIZER INC on September 24, 2024 and sell it today you would earn a total of  250.00  from holding PFIZER INC or generate 2.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Logan Ridge Finance  vs.  PFIZER INC

Logan Ridge Finance

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 2 (%) 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.

PFIZER INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PFIZER INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PFIZER 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 PFIZER

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

The idea behind Logan Ridge Finance and PFIZER INC 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.