Correlation Between 02005NBN9 and Logan Ridge

Can any of the company-specific risk be diversified away by investing in both 02005NBN9 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 02005NBN9 and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ALLY 47 and Logan Ridge Finance, you can compare the effects of market volatilities on 02005NBN9 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 02005NBN9 with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of 02005NBN9 and Logan Ridge.

Diversification Opportunities for 02005NBN9 and Logan Ridge

0.2

Correlation Coefficient

02005NBN9  Logan Ridge

Modest diversification

The 3 months correlation between 02005NBN9 and Logan is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ALLY 47 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 02005NBN9 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 ALLY 47 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 02005NBN9 i.e., 02005NBN9 and Logan Ridge go up and down completely randomly.

Pair Corralation between 02005NBN9 and Logan Ridge

Assuming the 90 days trading horizon ALLY 47 is expected to under-perform the Logan Ridge. In addition to that, 02005NBN9 is 2.49 times more volatile than Logan Ridge Finance. It trades about -0.06 of its total potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.06 per unit of volatility. If you would invest  2,356  in Logan Ridge Finance on October 8, 2024 and sell it today you would earn a total of  90.00  from holding Logan Ridge Finance or generate 3.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

ALLY 47  vs.  Logan Ridge Finance

02005NBN9

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALLY 47 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ALLY 47 investors.

Logan Ridge Finance

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 4 (%) 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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with 02005NBN9 and Logan Ridge

The main advantage of trading using opposite 02005NBN9 and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 02005NBN9 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 ALLY 47 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..