Correlation Between Eaton Vance and Logan Ridge

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

By analyzing existing cross correlation between Eaton Vance National and Logan Ridge Finance, you can compare the effects of market volatilities on Eaton Vance 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 Eaton Vance with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and Logan Ridge.

Diversification Opportunities for Eaton Vance and Logan Ridge

-0.03

Correlation Coefficient

Eaton Vance  Logan Ridge

Good diversification

The 3 months correlation between Eaton and Logan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National 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 Eaton Vance 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 Eaton Vance National 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 Eaton Vance i.e., Eaton Vance and Logan Ridge go up and down completely randomly.

Pair Corralation between Eaton Vance and Logan Ridge

Considering the 90-day investment horizon Eaton Vance is expected to generate 1688.5 times less return on investment than Logan Ridge. But when comparing it to its historical volatility, Eaton Vance National is 3.85 times less risky than Logan Ridge. It trades about 0.0 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 August 31, 2024 and sell it today you would earn a total of  477.00  from holding Logan Ridge Finance or generate 22.49% return on investment over 90 days.

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

Eaton Vance National  vs.  Logan Ridge Finance

Eaton Vance National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Logan Ridge Finance

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Logan Ridge exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eaton Vance and Logan Ridge

The main advantage of trading using opposite Eaton Vance and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance 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 Eaton Vance National 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.