Correlation Between Faraday Copper and Leading Edge
Can any of the company-specific risk be diversified away by investing in both Faraday Copper 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 Faraday Copper and Leading Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Faraday Copper Corp and Leading Edge Materials, you can compare the effects of market volatilities on Faraday Copper 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 Faraday Copper with a short position of Leading Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Faraday Copper and Leading Edge.
Diversification Opportunities for Faraday Copper and Leading Edge
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Faraday and Leading is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Faraday Copper Corp 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 Faraday Copper 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 Faraday Copper Corp 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 Faraday Copper i.e., Faraday Copper and Leading Edge go up and down completely randomly.
Pair Corralation between Faraday Copper and Leading Edge
Assuming the 90 days trading horizon Faraday Copper Corp is expected to generate 0.55 times more return on investment than Leading Edge. However, Faraday Copper Corp is 1.82 times less risky than Leading Edge. It trades about 0.03 of its potential returns per unit of risk. Leading Edge Materials is currently generating about 0.0 per unit of risk. If you would invest 76.00 in Faraday Copper Corp on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Faraday Copper Corp or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Faraday Copper Corp vs. Leading Edge Materials
Performance |
| Timeline |
| Faraday Copper Corp |
| Leading Edge Materials |
Faraday Copper and Leading Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Faraday Copper and Leading Edge
The main advantage of trading using opposite Faraday Copper and Leading Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Faraday Copper 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.| Faraday Copper vs. First Majestic Silver | Faraday Copper vs. Ivanhoe Energy | Faraday Copper vs. Orezone Gold Corp |
| Leading Edge vs. First Majestic Silver | Leading Edge vs. Ivanhoe Energy | Leading Edge vs. Orezone Gold Corp | Leading Edge vs. Faraday Copper Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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