Correlation Between Stepstone and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both Stepstone 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 Stepstone and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Logan Ridge Finance, you can compare the effects of market volatilities on Stepstone 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 Stepstone with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Logan Ridge.
Diversification Opportunities for Stepstone and Logan Ridge
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stepstone and Logan is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group 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 Stepstone 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 Stepstone Group 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 Stepstone i.e., Stepstone and Logan Ridge go up and down completely randomly.
Pair Corralation between Stepstone and Logan Ridge
Given the investment horizon of 90 days Stepstone Group is expected to under-perform the Logan Ridge. In addition to that, Stepstone is 2.36 times more volatile than Logan Ridge Finance. It trades about -0.16 of its total potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.13 per unit of volatility. If you would invest 2,430 in Logan Ridge Finance on November 27, 2024 and sell it today you would earn a total of 57.00 from holding Logan Ridge Finance or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Logan Ridge Finance
Performance |
| Timeline |
| Stepstone Group |
| Logan Ridge Finance |
Stepstone and Logan Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Logan Ridge
The main advantage of trading using opposite Stepstone and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone 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.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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