Correlation Between Logistea and Logistea A

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

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

Diversification Opportunities for Logistea and Logistea A

0.97

Correlation Coefficient

Logistea  Logistea A

Almost no diversification

The 3 months correlation between Logistea and Logistea is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Logistea AB Series and Logistea A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logistea A and Logistea 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 Logistea AB Series are associated (or correlated) with Logistea A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logistea A has no effect on the direction of Logistea i.e., Logistea and Logistea A go up and down completely randomly.

Pair Corralation between Logistea and Logistea A

Assuming the 90 days trading horizon Logistea is expected to generate 1.09 times less return on investment than Logistea A. But when comparing it to its historical volatility, Logistea AB Series is 1.09 times less risky than Logistea A. It trades about 0.11 of its potential returns per unit of risk. Logistea A is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,365  in Logistea A on April 25, 2025 and sell it today you would earn a total of  185.00  from holding Logistea A or generate 13.55% return on investment over 90 days.

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

Logistea AB Series  vs.  Logistea A

Logistea AB Series

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Logistea AB Series are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Logistea sustained solid returns over the last few months and may actually be approaching a breakup point.

Logistea A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Logistea A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Logistea A sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Logistea and Logistea A

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

The idea behind Logistea AB Series and Logistea 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.