Correlation Between Logan Ridge and TPG
Can any of the company-specific risk be diversified away by investing in both Logan Ridge and TPG 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 TPG 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 TPG Inc, you can compare the effects of market volatilities on Logan Ridge and TPG 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 TPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and TPG.
Diversification Opportunities for Logan Ridge and TPG
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Logan and TPG is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and TPG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Inc 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 TPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Inc has no effect on the direction of Logan Ridge i.e., Logan Ridge and TPG go up and down completely randomly.
Pair Corralation between Logan Ridge and TPG
Given the investment horizon of 90 days Logan Ridge is expected to generate 1.04 times less return on investment than TPG. But when comparing it to its historical volatility, Logan Ridge Finance is 2.72 times less risky than TPG. It trades about 0.19 of its potential returns per unit of risk. TPG Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,787 in TPG Inc on August 27, 2024 and sell it today you would earn a total of 279.00 from holding TPG Inc or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Logan Ridge Finance vs. TPG Inc
Performance |
| Timeline |
| Logan Ridge Finance |
| TPG Inc |
Logan Ridge and TPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logan Ridge and TPG
The main advantage of trading using opposite Logan Ridge and TPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge position performs unexpectedly, TPG 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 TPG will offset losses from the drop in TPG's long position.| Logan Ridge vs. PowerUp Acquisition Corp | Logan Ridge vs. Aurora Innovation | Logan Ridge vs. HUMANA INC | Logan Ridge vs. Aquagold International |
| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
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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