Correlation Between Logan Ridge and Independence Realty
Can any of the company-specific risk be diversified away by investing in both Logan Ridge and Independence Realty 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 Logan Ridge and Independence Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logan Ridge Finance and Independence Realty Trust, you can compare the effects of market volatilities on Logan Ridge and Independence Realty 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 Logan Ridge with a short position of Independence Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and Independence Realty.
Diversification Opportunities for Logan Ridge and Independence Realty
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Logan and Independence is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Independence Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Realty Trust and Logan Ridge 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 Logan Ridge Finance are associated (or correlated) with Independence Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Realty Trust has no effect on the direction of Logan Ridge i.e., Logan Ridge and Independence Realty go up and down completely randomly.
Pair Corralation between Logan Ridge and Independence Realty
Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 0.86 times more return on investment than Independence Realty. However, Logan Ridge Finance is 1.16 times less risky than Independence Realty. It trades about 0.06 of its potential returns per unit of risk. Independence Realty Trust is currently generating about -0.04 per unit of risk. If you would invest 2,412 in Logan Ridge Finance on September 23, 2024 and sell it today you would earn a total of 104.00 from holding Logan Ridge Finance or generate 4.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Logan Ridge Finance vs. Independence Realty Trust
Performance |
Timeline |
Logan Ridge Finance |
Independence Realty Trust |
Logan Ridge and Independence Realty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Logan Ridge and Independence Realty
The main advantage of trading using opposite Logan Ridge and Independence Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logan Ridge position performs unexpectedly, Independence Realty 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 Independence Realty will offset losses from the drop in Independence Realty's long position.Logan Ridge vs. Aquagold International | Logan Ridge vs. Morningstar Unconstrained Allocation | Logan Ridge vs. Thrivent High Yield | Logan Ridge vs. Via Renewables |
Independence Realty vs. Apartment Investment and | Independence Realty vs. Clipper Realty | Independence Realty vs. BRT Realty Trust | Independence Realty vs. UDR Inc |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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