Correlation Between Inotiv and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both Inotiv and Logan Ridge 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 Inotiv and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inotiv Inc and Logan Ridge Finance, you can compare the effects of market volatilities on Inotiv and Logan Ridge 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 Inotiv with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inotiv and Logan Ridge.
Diversification Opportunities for Inotiv and Logan Ridge
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inotiv and Logan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Inotiv Inc and Logan Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logan Ridge Finance and Inotiv 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 Inotiv Inc are associated (or correlated) with Logan Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logan Ridge Finance has no effect on the direction of Inotiv i.e., Inotiv and Logan Ridge go up and down completely randomly.
Pair Corralation between Inotiv and Logan Ridge
Given the investment horizon of 90 days Inotiv Inc is expected to generate 7.19 times more return on investment than Logan Ridge. However, Inotiv is 7.19 times more volatile than Logan Ridge Finance. It trades about 0.39 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.24 per unit of risk. If you would invest 176.00 in Inotiv Inc on August 23, 2024 and sell it today you would earn a total of 165.00 from holding Inotiv Inc or generate 93.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inotiv Inc vs. Logan Ridge Finance
Performance |
| Timeline |
| Inotiv Inc |
| Logan Ridge Finance |
Inotiv and Logan Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inotiv and Logan Ridge
The main advantage of trading using opposite Inotiv and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inotiv position performs unexpectedly, Logan Ridge 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 Logan Ridge will offset losses from the drop in Logan Ridge's long position.The idea behind Inotiv Inc and Logan Ridge Finance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Logan Ridge vs. Badger Infrastructure Solutions | Logan Ridge vs. Portman Ridge Finance | Logan Ridge vs. Inotiv Inc | Logan Ridge vs. Phenixfin |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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