Correlation Between Associated Capital and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both Associated Capital 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 Associated Capital and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Logan Ridge Finance, you can compare the effects of market volatilities on Associated Capital 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 Associated Capital with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Logan Ridge.
Diversification Opportunities for Associated Capital and Logan Ridge
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and Logan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group 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 Associated Capital 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 Associated Capital Group 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 Associated Capital i.e., Associated Capital and Logan Ridge go up and down completely randomly.
Pair Corralation between Associated Capital and Logan Ridge
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 1.54 times less return on investment than Logan Ridge. But when comparing it to its historical volatility, Associated Capital Group is 1.16 times less risky than Logan Ridge. It trades about 0.15 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,391 in Logan Ridge Finance on August 24, 2024 and sell it today you would earn a total of 120.00 from holding Logan Ridge Finance or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Associated Capital Group vs. Logan Ridge Finance
Performance |
| Timeline |
| Associated Capital |
| Logan Ridge Finance |
Associated Capital and Logan Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Logan Ridge
The main advantage of trading using opposite Associated Capital and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| Logan Ridge vs. Badger Infrastructure Solutions | Logan Ridge vs. Portman Ridge Finance | Logan Ridge vs. Inotiv Inc | Logan Ridge vs. Phenixfin |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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