Correlation Between Scandinavian ChemoTech and Leading Edge
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By analyzing existing cross correlation between Scandinavian ChemoTech AB and Leading Edge Materials, you can compare the effects of market volatilities on Scandinavian ChemoTech 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 Scandinavian ChemoTech with a short position of Leading Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian ChemoTech and Leading Edge.
Diversification Opportunities for Scandinavian ChemoTech and Leading Edge
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scandinavian and Leading is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian ChemoTech AB 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 Scandinavian ChemoTech 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 Scandinavian ChemoTech AB 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 Scandinavian ChemoTech i.e., Scandinavian ChemoTech and Leading Edge go up and down completely randomly.
Pair Corralation between Scandinavian ChemoTech and Leading Edge
Assuming the 90 days trading horizon Scandinavian ChemoTech AB is expected to under-perform the Leading Edge. In addition to that, Scandinavian ChemoTech is 1.42 times more volatile than Leading Edge Materials. It trades about -0.04 of its total potential returns per unit of risk. Leading Edge Materials is currently generating about -0.02 per unit of volatility. If you would invest 161.00 in Leading Edge Materials on November 2, 2024 and sell it today you would lose (88.00) from holding Leading Edge Materials or give up 54.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian ChemoTech AB vs. Leading Edge Materials
Performance |
| Timeline |
| Scandinavian ChemoTech |
| Leading Edge Materials |
Scandinavian ChemoTech and Leading Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian ChemoTech and Leading Edge
The main advantage of trading using opposite Scandinavian ChemoTech and Leading Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian ChemoTech 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.| Scandinavian ChemoTech vs. Vicore Pharma Holding | Scandinavian ChemoTech vs. Enorama Pharma AB | Scandinavian ChemoTech vs. Xintela AB | Scandinavian ChemoTech vs. Alzinova AB |
| Leading Edge vs. Boliden AB | Leading Edge vs. AAC Clyde Space | Leading Edge vs. Tele2 AB | Leading Edge vs. BillerudKorsnas AB |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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