Correlation Between Logan Ridge and Chesapeake Finl
Can any of the company-specific risk be diversified away by investing in both Logan Ridge and Chesapeake Finl 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 Chesapeake Finl 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 Chesapeake Finl Shs, you can compare the effects of market volatilities on Logan Ridge and Chesapeake Finl 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 Chesapeake Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and Chesapeake Finl.
Diversification Opportunities for Logan Ridge and Chesapeake Finl
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Logan and Chesapeake is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Chesapeake Finl Shs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Finl Shs 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 Chesapeake Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Finl Shs has no effect on the direction of Logan Ridge i.e., Logan Ridge and Chesapeake Finl go up and down completely randomly.
Pair Corralation between Logan Ridge and Chesapeake Finl
Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 1.22 times more return on investment than Chesapeake Finl. However, Logan Ridge is 1.22 times more volatile than Chesapeake Finl Shs. It trades about 0.09 of its potential returns per unit of risk. Chesapeake Finl Shs is currently generating about 0.06 per unit of risk. If you would invest 2,485 in Logan Ridge Finance on September 3, 2024 and sell it today you would earn a total of 57.00 from holding Logan Ridge Finance or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Logan Ridge Finance vs. Chesapeake Finl Shs
Performance |
| Timeline |
| Logan Ridge Finance |
| Chesapeake Finl Shs |
Logan Ridge and Chesapeake Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logan Ridge and Chesapeake Finl
The main advantage of trading using opposite Logan Ridge and Chesapeake Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge position performs unexpectedly, Chesapeake Finl 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 Chesapeake Finl will offset losses from the drop in Chesapeake Finl's long position.| Logan Ridge vs. Badger Infrastructure Solutions | Logan Ridge vs. Portman Ridge Finance | Logan Ridge vs. Inotiv Inc | Logan Ridge vs. Phenixfin |
| Chesapeake Finl vs. Western Asset Global | Chesapeake Finl vs. Invesco Trust For | Chesapeake Finl vs. Logan Ridge Finance | Chesapeake Finl vs. Invesco Advantage MIT |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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