Correlation Between Logan Ridge and AmTrust Financial
Can any of the company-specific risk be diversified away by investing in both Logan Ridge and AmTrust Financial 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 Logan Ridge and AmTrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logan Ridge Finance and AmTrust Financial Services, you can compare the effects of market volatilities on Logan Ridge and AmTrust Financial 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 Logan Ridge with a short position of AmTrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and AmTrust Financial.
Diversification Opportunities for Logan Ridge and AmTrust Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Logan and AmTrust is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial and Logan Ridge 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 Logan Ridge Finance are associated (or correlated) with AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of Logan Ridge i.e., Logan Ridge and AmTrust Financial go up and down completely randomly.
Pair Corralation between Logan Ridge and AmTrust Financial
Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 0.94 times more return on investment than AmTrust Financial. However, Logan Ridge Finance is 1.06 times less risky than AmTrust Financial. It trades about 0.2 of its potential returns per unit of risk. AmTrust Financial Services is currently generating about 0.07 per unit of risk. If you would invest 2,465 in Logan Ridge Finance on August 31, 2024 and sell it today you would earn a total of 133.00 from holding Logan Ridge Finance or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Logan Ridge Finance vs. AmTrust Financial Services
Performance |
| Timeline |
| Logan Ridge Finance |
| AmTrust Financial |
Logan Ridge and AmTrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logan Ridge and AmTrust Financial
The main advantage of trading using opposite Logan Ridge and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge position performs unexpectedly, AmTrust Financial 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 AmTrust Financial will offset losses from the drop in AmTrust Financial's long position.| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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