Correlation Between Logan Ridge and Farmers Merchants
Can any of the company-specific risk be diversified away by investing in both Logan Ridge and Farmers Merchants 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 Farmers Merchants 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 Farmers Merchants Bancorp, you can compare the effects of market volatilities on Logan Ridge and Farmers Merchants 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 Farmers Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and Farmers Merchants.
Diversification Opportunities for Logan Ridge and Farmers Merchants
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Logan and Farmers is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Farmers Merchants Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Merchants Bancorp 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 Farmers Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Merchants Bancorp has no effect on the direction of Logan Ridge i.e., Logan Ridge and Farmers Merchants go up and down completely randomly.
Pair Corralation between Logan Ridge and Farmers Merchants
Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 0.67 times more return on investment than Farmers Merchants. However, Logan Ridge Finance is 1.5 times less risky than Farmers Merchants. It trades about 0.05 of its potential returns per unit of risk. Farmers Merchants Bancorp is currently generating about 0.02 per unit of risk. If you would invest 1,969 in Logan Ridge Finance on September 12, 2024 and sell it today you would earn a total of 506.00 from holding Logan Ridge Finance or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.34% |
| Values | Daily Returns |
Logan Ridge Finance vs. Farmers Merchants Bancorp
Performance |
| Timeline |
| Logan Ridge Finance |
| Farmers Merchants Bancorp |
Logan Ridge and Farmers Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logan Ridge and Farmers Merchants
The main advantage of trading using opposite Logan Ridge and Farmers Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge position performs unexpectedly, Farmers Merchants 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 Farmers Merchants will offset losses from the drop in Farmers Merchants' long position.| Logan Ridge vs. Gladstone Investment | Logan Ridge vs. Stellus Capital Investment | Logan Ridge vs. Prospect Capital | Logan Ridge vs. Gladstone Capital |
| Farmers Merchants vs. Freedom Bank of | Farmers Merchants vs. HUMANA INC | Farmers Merchants vs. Barloworld Ltd ADR | Farmers Merchants vs. Morningstar Unconstrained Allocation |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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