Correlation Between Southwest Gas and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both Southwest Gas 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 Southwest Gas and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwest Gas Holdings and Logan Ridge Finance, you can compare the effects of market volatilities on Southwest Gas 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 Southwest Gas with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Gas and Logan Ridge.
Diversification Opportunities for Southwest Gas and Logan Ridge
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Southwest and Logan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Gas Holdings 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 Southwest Gas 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 Southwest Gas Holdings 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 Southwest Gas i.e., Southwest Gas and Logan Ridge go up and down completely randomly.
Pair Corralation between Southwest Gas and Logan Ridge
Considering the 90-day investment horizon Southwest Gas is expected to generate 2.15 times less return on investment than Logan Ridge. But when comparing it to its historical volatility, Southwest Gas Holdings is 1.24 times less risky than Logan Ridge. It trades about 0.11 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,121 in Logan Ridge Finance on September 2, 2024 and sell it today you would earn a total of 479.00 from holding Logan Ridge Finance or generate 22.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Gas Holdings vs. Logan Ridge Finance
Performance |
| Timeline |
| Southwest Gas Holdings |
| Logan Ridge Finance |
Southwest Gas and Logan Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Gas and Logan Ridge
The main advantage of trading using opposite Southwest Gas and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Gas 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.| Southwest Gas vs. NewJersey Resources | Southwest Gas vs. Northwest Natural Gas | Southwest Gas vs. NorthWestern | Southwest Gas vs. Chesapeake Utilities |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |