Correlation Between Logan Ridge and QNB Corp
Can any of the company-specific risk be diversified away by investing in both Logan Ridge and QNB Corp 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 QNB Corp 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 QNB Corp, you can compare the effects of market volatilities on Logan Ridge and QNB Corp 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 QNB Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and QNB Corp.
Diversification Opportunities for Logan Ridge and QNB Corp
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Logan and QNB is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and QNB Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QNB Corp 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 QNB Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QNB Corp has no effect on the direction of Logan Ridge i.e., Logan Ridge and QNB Corp go up and down completely randomly.
Pair Corralation between Logan Ridge and QNB Corp
Given the investment horizon of 90 days Logan Ridge is expected to generate 2.07 times less return on investment than QNB Corp. In addition to that, Logan Ridge is 1.79 times more volatile than QNB Corp. It trades about 0.09 of its total potential returns per unit of risk. QNB Corp is currently generating about 0.35 per unit of volatility. If you would invest 3,140 in QNB Corp on September 3, 2024 and sell it today you would earn a total of 160.00 from holding QNB Corp or generate 5.1% 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. QNB Corp
Performance |
| Timeline |
| Logan Ridge Finance |
| QNB Corp |
Logan Ridge and QNB Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logan Ridge and QNB Corp
The main advantage of trading using opposite Logan Ridge and QNB Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge position performs unexpectedly, QNB Corp 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 QNB Corp will offset losses from the drop in QNB Corp's long position.| Logan Ridge vs. Badger Infrastructure Solutions | Logan Ridge vs. Portman Ridge Finance | Logan Ridge vs. Inotiv Inc | Logan Ridge vs. Phenixfin |
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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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