Correlation Between Equinix and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both Equinix 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 Equinix and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and Logan Ridge Finance, you can compare the effects of market volatilities on Equinix 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 Equinix with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and Logan Ridge.
Diversification Opportunities for Equinix and Logan Ridge
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Equinix and Logan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Equinix 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 Equinix 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 Equinix 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 Equinix i.e., Equinix and Logan Ridge go up and down completely randomly.
Pair Corralation between Equinix and Logan Ridge
Given the investment horizon of 90 days Equinix is expected to generate 1.27 times more return on investment than Logan Ridge. However, Equinix is 1.27 times more volatile than Logan Ridge Finance. It trades about 0.16 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.12 per unit of risk. If you would invest 68,323 in Equinix on September 3, 2024 and sell it today you would earn a total of 29,825 from holding Equinix or generate 43.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinix vs. Logan Ridge Finance
Performance |
| Timeline |
| Equinix |
| Logan Ridge Finance |
Equinix and Logan Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and Logan Ridge
The main advantage of trading using opposite Equinix and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix 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.| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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