Correlation Between Daily Journal and Logility

Can any of the company-specific risk be diversified away by investing in both Daily Journal and Logility 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 Daily Journal and Logility into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Daily Journal Corp and Logility, you can compare the effects of market volatilities on Daily Journal and Logility 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 Daily Journal with a short position of Logility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daily Journal and Logility.

Diversification Opportunities for Daily Journal and Logility

0.58

Correlation Coefficient

Daily Journal  Logility

Very weak diversification

The 3 months correlation between Daily and Logility is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp and Logility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logility and Daily Journal 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 Daily Journal Corp are associated (or correlated) with Logility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logility has no effect on the direction of Daily Journal i.e., Daily Journal and Logility go up and down completely randomly.

Pair Corralation between Daily Journal and Logility

Given the investment horizon of 90 days Daily Journal Corp is expected to generate 0.98 times more return on investment than Logility. However, Daily Journal Corp is 1.02 times less risky than Logility. It trades about 0.11 of its potential returns per unit of risk. Logility is currently generating about 0.02 per unit of risk. If you would invest  49,010  in Daily Journal Corp on September 29, 2024 and sell it today you would earn a total of  8,609  from holding Daily Journal Corp or generate 17.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Daily Journal Corp  vs.  Logility

Daily Journal Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Daily Journal Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Daily Journal displayed solid returns over the last few months and may actually be approaching a breakup point.

Logility

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Logility are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Logility is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Daily Journal and Logility

The main advantage of trading using opposite Daily Journal and Logility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daily Journal position performs unexpectedly, Logility 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 Logility will offset losses from the drop in Logility's long position.

The idea behind Daily Journal Corp and Logility 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..