Correlation Between DWS Municipal and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both DWS Municipal 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 DWS Municipal and Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DWS Municipal Income and Logan Ridge Finance, you can compare the effects of market volatilities on DWS Municipal 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 DWS Municipal with a short position of Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of DWS Municipal and Logan Ridge.
Diversification Opportunities for DWS Municipal and Logan Ridge
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DWS and Logan is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding DWS Municipal Income 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 DWS Municipal 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 DWS Municipal Income 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 DWS Municipal i.e., DWS Municipal and Logan Ridge go up and down completely randomly.
Pair Corralation between DWS Municipal and Logan Ridge
Considering the 90-day investment horizon DWS Municipal Income is expected to generate 0.39 times more return on investment than Logan Ridge. However, DWS Municipal Income is 2.58 times less risky than Logan Ridge. It trades about 0.39 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about -0.01 per unit of risk. If you would invest 967.00 in DWS Municipal Income on June 9, 2024 and sell it today you would earn a total of 22.00 from holding DWS Municipal Income or generate 2.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DWS Municipal Income vs. Logan Ridge Finance
Performance |
Timeline |
DWS Municipal Income |
Logan Ridge Finance |
DWS Municipal and Logan Ridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DWS Municipal and Logan Ridge
The main advantage of trading using opposite DWS Municipal and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DWS Municipal 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.DWS Municipal vs. Invesco High Income | DWS Municipal vs. Federated Premier Municipal | DWS Municipal vs. AllianzGI Convertible Income |
Logan Ridge vs. AllianzGI Convertible Income | Logan Ridge vs. MFS Investment Grade | Logan Ridge vs. Eaton Vance National | Logan Ridge vs. Invesco Trust For |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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