Correlation Between Puyi and Logan Ridge

Can any of the company-specific risk be diversified away by investing in both Puyi and Logan Ridge 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 Puyi and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Puyi Inc ADR and Logan Ridge Finance, you can compare the effects of market volatilities on Puyi and Logan Ridge 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 Puyi with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puyi and Logan Ridge.

Diversification Opportunities for Puyi and Logan Ridge

0.0

Correlation Coefficient

Puyi  Logan Ridge

Pay attention - limited upside

The 3 months correlation between Puyi and Logan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Puyi Inc ADR and Logan Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logan Ridge Finance and Puyi 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 Puyi Inc ADR are associated (or correlated) with Logan Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logan Ridge Finance has no effect on the direction of Puyi i.e., Puyi and Logan Ridge go up and down completely randomly.

Pair Corralation between Puyi and Logan Ridge

If you would invest (100.00) in Puyi Inc ADR on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Puyi Inc ADR or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Puyi Inc ADR  vs.  Logan Ridge Finance

Puyi Inc ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Puyi Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Puyi is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

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.

Pair Trading with Puyi and Logan Ridge

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

The idea behind Puyi Inc ADR and Logan Ridge Finance 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.