Correlation Between Logan Ridge and Visa

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

Diversification Opportunities for Logan Ridge and Visa

0.82

Correlation Coefficient

Logan Ridge  Visa

Very poor diversification

The 3 months correlation between Logan and Visa is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Logan Ridge i.e., Logan Ridge and Visa go up and down completely randomly.

Pair Corralation between Logan Ridge and Visa

Given the investment horizon of 90 days Logan Ridge is expected to generate 1.87 times less return on investment than Visa. In addition to that, Logan Ridge is 1.06 times more volatile than Visa Class A. It trades about 0.07 of its total potential returns per unit of risk. Visa Class A is currently generating about 0.15 per unit of volatility. If you would invest  28,469  in Visa Class A on September 19, 2024 and sell it today you would earn a total of  3,361  from holding Visa Class A or generate 11.81% return on investment over 90 days.

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

Logan Ridge Finance  vs.  Visa Class A

Logan Ridge Finance

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Logan Ridge is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Visa Class A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Logan Ridge and Visa

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

The idea behind Logan Ridge Finance and Visa Class A 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.