Correlation Between Logan Ridge and Swedbank

Can any of the company-specific risk be diversified away by investing in both Logan Ridge and Swedbank 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 Swedbank 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 Swedbank AB, you can compare the effects of market volatilities on Logan Ridge and Swedbank 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 Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logan Ridge and Swedbank.

Diversification Opportunities for Logan Ridge and Swedbank

-0.59

Correlation Coefficient

Logan Ridge  Swedbank

Excellent diversification

The 3 months correlation between Logan and Swedbank is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB 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 Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of Logan Ridge i.e., Logan Ridge and Swedbank go up and down completely randomly.

Pair Corralation between Logan Ridge and Swedbank

Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 1.22 times more return on investment than Swedbank. However, Logan Ridge is 1.22 times more volatile than Swedbank AB. It trades about 0.14 of its potential returns per unit of risk. Swedbank AB is currently generating about -0.08 per unit of risk. If you would invest  2,114  in Logan Ridge Finance on September 5, 2024 and sell it today you would earn a total of  367.00  from holding Logan Ridge Finance or generate 17.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Logan Ridge Finance  vs.  Swedbank AB

Logan Ridge Finance

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 11 (%) 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.

Swedbank AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swedbank AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Logan Ridge and Swedbank

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

The idea behind Logan Ridge Finance and Swedbank AB 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.