Correlation Between ADT and LogicMark
Can any of the company-specific risk be diversified away by investing in both ADT and LogicMark 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 ADT and LogicMark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADT Inc and LogicMark, you can compare the effects of market volatilities on ADT and LogicMark 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 ADT with a short position of LogicMark. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADT and LogicMark.
Diversification Opportunities for ADT and LogicMark
Good diversification
The 3 months correlation between ADT and LogicMark is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ADT Inc and LogicMark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LogicMark and ADT 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 ADT Inc are associated (or correlated) with LogicMark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LogicMark has no effect on the direction of ADT i.e., ADT and LogicMark go up and down completely randomly.
Pair Corralation between ADT and LogicMark
Considering the 90-day investment horizon ADT Inc is expected to generate 0.34 times more return on investment than LogicMark. However, ADT Inc is 2.98 times less risky than LogicMark. It trades about 0.02 of its potential returns per unit of risk. LogicMark is currently generating about -0.06 per unit of risk. If you would invest 687.00 in ADT Inc on August 24, 2024 and sell it today you would earn a total of 67.00 from holding ADT Inc or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADT Inc vs. LogicMark
Performance |
| Timeline |
| ADT Inc |
| LogicMark |
ADT and LogicMark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADT and LogicMark
The main advantage of trading using opposite ADT and LogicMark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADT position performs unexpectedly, LogicMark 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 LogicMark will offset losses from the drop in LogicMark's long position.The idea behind ADT Inc and LogicMark 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.| LogicMark vs. Guardforce AI Co | LogicMark vs. Knightscope | LogicMark vs. Bridger Aerospace Group | LogicMark vs. Iveda Solutions |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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