Correlation Between WhiteHorse Finance and Logan Ridge

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

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

Diversification Opportunities for WhiteHorse Finance and Logan Ridge

-0.24

Correlation Coefficient

WhiteHorse Finance  Logan Ridge

Very good diversification

The 3 months correlation between WhiteHorse and Logan is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding WhiteHorse Finance 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 WhiteHorse Finance 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 WhiteHorse Finance 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 WhiteHorse Finance i.e., WhiteHorse Finance and Logan Ridge go up and down completely randomly.

Pair Corralation between WhiteHorse Finance and Logan Ridge

Considering the 90-day investment horizon WhiteHorse Finance is expected to under-perform the Logan Ridge. But the stock apears to be less risky and, when comparing its historical volatility, WhiteHorse Finance is 1.57 times less risky than Logan Ridge. The stock trades about -0.09 of its potential returns per unit of risk. The 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

WhiteHorse Finance  vs.  Logan Ridge Finance

WhiteHorse Finance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WhiteHorse Finance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 WhiteHorse Finance and Logan Ridge

The main advantage of trading using opposite WhiteHorse Finance and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WhiteHorse Finance 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 WhiteHorse Finance 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.