Correlation Between Logan Ridge and Aduro Clean

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

Diversification Opportunities for Logan Ridge and Aduro Clean

0.0

Correlation Coefficient

Logan Ridge  Aduro Clean

Pay attention - limited upside

The 3 months correlation between Logan and Aduro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Logan Ridge Finance and Aduro Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aduro Clean Technologies 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 Aduro Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aduro Clean Technologies has no effect on the direction of Logan Ridge i.e., Logan Ridge and Aduro Clean go up and down completely randomly.

Pair Corralation between Logan Ridge and Aduro Clean

Given the investment horizon of 90 days Logan Ridge Finance is expected to generate 0.18 times more return on investment than Aduro Clean. However, Logan Ridge Finance is 5.49 times less risky than Aduro Clean. It trades about 0.13 of its potential returns per unit of risk. Aduro Clean Technologies is currently generating about -0.09 per unit of risk. If you would invest  2,215  in Logan Ridge Finance on February 21, 2024 and sell it today you would earn a total of  35.00  from holding Logan Ridge Finance or generate 1.58% return on investment over 90 days.

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

Logan Ridge Finance  vs.  Aduro Clean Technologies

Logan Ridge Finance

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Logan Ridge Finance are ranked lower than 2 (%) 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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Aduro Clean Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aduro Clean Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Aduro Clean is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Logan Ridge and Aduro Clean

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

The idea behind Logan Ridge Finance and Aduro Clean Technologies 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.