Correlation Between FREEPORT and Logan Ridge

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

By analyzing existing cross correlation between FREEPORT MCMORAN INC 4625 and Logan Ridge Finance, you can compare the effects of market volatilities on FREEPORT 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 FREEPORT with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREEPORT and Logan Ridge.

Diversification Opportunities for FREEPORT and Logan Ridge

-0.31

Correlation Coefficient

FREEPORT  Logan Ridge

Very good diversification

The 3 months correlation between FREEPORT and Logan is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding FREEPORT MCMORAN INC 4625 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 FREEPORT 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 FREEPORT MCMORAN INC 4625 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 FREEPORT i.e., FREEPORT and Logan Ridge go up and down completely randomly.

Pair Corralation between FREEPORT and Logan Ridge

Assuming the 90 days trading horizon FREEPORT is expected to generate 33.0 times less return on investment than Logan Ridge. But when comparing it to its historical volatility, FREEPORT MCMORAN INC 4625 is 1.67 times less risky than Logan Ridge. It trades about 0.0 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,195  in Logan Ridge Finance on September 27, 2024 and sell it today you would earn a total of  282.00  from holding Logan Ridge Finance or generate 12.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

FREEPORT MCMORAN INC 4625  vs.  Logan Ridge Finance

FREEPORT MCMORAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FREEPORT MCMORAN INC 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FREEPORT is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Logan Ridge Finance

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with FREEPORT and Logan Ridge

The main advantage of trading using opposite FREEPORT and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREEPORT 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 FREEPORT MCMORAN INC 4625 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.