Correlation Between Digi International and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Logan Ridge Finance, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Logan Ridge.
Diversification Opportunities for Digi International and Logan Ridge
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Digi and Logan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Digi International 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 Digi International 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 Digi International 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 Digi International i.e., Digi International and Logan Ridge go up and down completely randomly.
Pair Corralation between Digi International and Logan Ridge
Given the investment horizon of 90 days Digi International is expected to generate 1.03 times less return on investment than Logan Ridge. In addition to that, Digi International is 2.33 times more volatile than Logan Ridge Finance. It trades about 0.01 of its total potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.03 per unit of volatility. If you would invest 2,191 in Logan Ridge Finance on November 27, 2024 and sell it today you would earn a total of 296.00 from holding Logan Ridge Finance or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Logan Ridge Finance
Performance |
| Timeline |
| Digi International |
| Logan Ridge Finance |
Digi International and Logan Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Logan Ridge
The main advantage of trading using opposite Digi International and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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