Correlation Between Filo Mining and Leading Edge
Can any of the company-specific risk be diversified away by investing in both Filo Mining 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 Filo Mining and Leading Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Filo Mining Corp and Leading Edge Materials, you can compare the effects of market volatilities on Filo Mining 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 Filo Mining with a short position of Leading Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Filo Mining and Leading Edge.
Diversification Opportunities for Filo Mining and Leading Edge
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Filo and Leading is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Filo Mining 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 Filo Mining 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 Filo Mining 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 Filo Mining i.e., Filo Mining and Leading Edge go up and down completely randomly.
Pair Corralation between Filo Mining and Leading Edge
Assuming the 90 days trading horizon Filo Mining Corp is expected to generate 0.59 times more return on investment than Leading Edge. However, Filo Mining Corp is 1.68 times less risky than Leading Edge. It trades about 0.04 of its potential returns per unit of risk. Leading Edge Materials is currently generating about -0.02 per unit of risk. If you would invest 17,520 in Filo Mining Corp on November 2, 2024 and sell it today you would earn a total of 7,230 from holding Filo Mining Corp or generate 41.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.18% |
| Values | Daily Returns |
Filo Mining Corp vs. Leading Edge Materials
Performance |
| Timeline |
| Filo Mining Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Leading Edge Materials |
Filo Mining and Leading Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Filo Mining and Leading Edge
The main advantage of trading using opposite Filo Mining and Leading Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Filo Mining 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.| Filo Mining vs. Boliden AB | Filo Mining vs. Leading Edge Materials | Filo Mining vs. AAC Clyde Space | Filo Mining vs. Tele2 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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