Correlation Between Logan Ridge and Trimax Corp
Can any of the company-specific risk be diversified away by investing in both Logan Ridge and Trimax 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 Trimax 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 Trimax Corp, you can compare the effects of market volatilities on Logan Ridge and Trimax 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 Trimax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and Trimax Corp.
Diversification Opportunities for Logan Ridge and Trimax Corp
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Logan and Trimax is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Trimax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimax 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 Trimax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimax Corp has no effect on the direction of Logan Ridge i.e., Logan Ridge and Trimax Corp go up and down completely randomly.
Pair Corralation between Logan Ridge and Trimax Corp
Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 0.13 times more return on investment than Trimax Corp. However, Logan Ridge Finance is 7.63 times less risky than Trimax Corp. It trades about -0.02 of its potential returns per unit of risk. Trimax Corp is currently generating about -0.2 per unit of risk. If you would invest 2,493 in Logan Ridge Finance on September 12, 2024 and sell it today you would lose (18.00) from holding Logan Ridge Finance or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Logan Ridge Finance vs. Trimax Corp
Performance |
| Timeline |
| Logan Ridge Finance |
| Trimax Corp |
Logan Ridge and Trimax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logan Ridge and Trimax Corp
The main advantage of trading using opposite Logan Ridge and Trimax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge position performs unexpectedly, Trimax 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 Trimax Corp will offset losses from the drop in Trimax Corp's long position.| Logan Ridge vs. Gladstone Investment | Logan Ridge vs. Stellus Capital Investment | Logan Ridge vs. Prospect Capital | Logan Ridge vs. Gladstone Capital |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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