Correlation Between Logan Ridge and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Logan Ridge and BJs Restaurants 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 BJs Restaurants 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 BJs Restaurants, you can compare the effects of market volatilities on Logan Ridge and BJs Restaurants 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 BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and BJs Restaurants.
Diversification Opportunities for Logan Ridge and BJs Restaurants
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Logan and BJs is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants 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 BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Logan Ridge i.e., Logan Ridge and BJs Restaurants go up and down completely randomly.
Pair Corralation between Logan Ridge and BJs Restaurants
Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 0.9 times more return on investment than BJs Restaurants. However, Logan Ridge Finance is 1.11 times less risky than BJs Restaurants. It trades about 0.03 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.03 per unit of risk. If you would invest 2,477 in Logan Ridge Finance on November 3, 2024 and sell it today you would earn a total of 22.00 from holding Logan Ridge Finance or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Logan Ridge Finance vs. BJs Restaurants
Performance |
| Timeline |
| Logan Ridge Finance |
| BJs Restaurants |
Logan Ridge and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logan Ridge and BJs Restaurants
The main advantage of trading using opposite Logan Ridge and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge position performs unexpectedly, BJs Restaurants 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 BJs Restaurants will offset losses from the drop in BJs Restaurants' long position.| Logan Ridge vs. Badger Infrastructure Solutions | Logan Ridge vs. Portman Ridge Finance | Logan Ridge vs. Inotiv Inc | Logan Ridge vs. Phenixfin |
| BJs Restaurants vs. Dine Brands Global | BJs Restaurants vs. Brinker International | BJs Restaurants vs. Bloomin Brands | BJs Restaurants vs. The Cheesecake Factory |
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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