Correlation Between CDN Maverick and Leading Edge
Can any of the company-specific risk be diversified away by investing in both CDN Maverick and Leading Edge 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 CDN Maverick and Leading Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDN Maverick Capital and Leading Edge Materials, you can compare the effects of market volatilities on CDN Maverick and Leading Edge 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 CDN Maverick with a short position of Leading Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN Maverick and Leading Edge.
Diversification Opportunities for CDN Maverick and Leading Edge
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CDN and Leading is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding CDN Maverick Capital and Leading Edge Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leading Edge Materials and CDN Maverick 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 CDN Maverick Capital are associated (or correlated) with Leading Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leading Edge Materials has no effect on the direction of CDN Maverick i.e., CDN Maverick and Leading Edge go up and down completely randomly.
Pair Corralation between CDN Maverick and Leading Edge
Assuming the 90 days horizon CDN Maverick Capital is expected to under-perform the Leading Edge. But the otc stock apears to be less risky and, when comparing its historical volatility, CDN Maverick Capital is 1.7 times less risky than Leading Edge. The otc stock trades about -0.1 of its potential returns per unit of risk. The Leading Edge Materials is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 7.10 in Leading Edge Materials on August 29, 2024 and sell it today you would lose (0.50) from holding Leading Edge Materials or give up 7.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CDN Maverick Capital vs. Leading Edge Materials
Performance |
| Timeline |
| CDN Maverick Capital |
| Leading Edge Materials |
CDN Maverick and Leading Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN Maverick and Leading Edge
The main advantage of trading using opposite CDN Maverick and Leading Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN Maverick position performs unexpectedly, Leading Edge 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 Leading Edge will offset losses from the drop in Leading Edge's long position.| CDN Maverick vs. Aurelia Metals Limited | CDN Maverick vs. Artemis Resources | CDN Maverick vs. Ascendant Resources | CDN Maverick vs. Azimut Exploration |
| Leading Edge vs. Grid Metals Corp | Leading Edge vs. Fireweed Zinc | Leading Edge vs. First American Silver | Leading Edge vs. Australian Strategic Materials |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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