Correlation Between Leading Edge and Lomiko Metals
Can any of the company-specific risk be diversified away by investing in both Leading Edge and Lomiko Metals 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 Leading Edge and Lomiko Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leading Edge Materials and Lomiko Metals, you can compare the effects of market volatilities on Leading Edge and Lomiko Metals 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 Leading Edge with a short position of Lomiko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leading Edge and Lomiko Metals.
Diversification Opportunities for Leading Edge and Lomiko Metals
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leading and Lomiko is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Leading Edge Materials and Lomiko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lomiko Metals and Leading Edge 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 Leading Edge Materials are associated (or correlated) with Lomiko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lomiko Metals has no effect on the direction of Leading Edge i.e., Leading Edge and Lomiko Metals go up and down completely randomly.
Pair Corralation between Leading Edge and Lomiko Metals
Assuming the 90 days horizon Leading Edge Materials is expected to generate 1.02 times more return on investment than Lomiko Metals. However, Leading Edge is 1.02 times more volatile than Lomiko Metals. It trades about -0.03 of its potential returns per unit of risk. Lomiko Metals is currently generating about -0.12 per unit of risk. If you would invest 14.00 in Leading Edge Materials on September 1, 2024 and sell it today you would lose (5.00) from holding Leading Edge Materials or give up 35.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leading Edge Materials vs. Lomiko Metals
Performance |
| Timeline |
| Leading Edge Materials |
| Lomiko Metals |
Leading Edge and Lomiko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leading Edge and Lomiko Metals
The main advantage of trading using opposite Leading Edge and Lomiko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leading Edge position performs unexpectedly, Lomiko Metals 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 Lomiko Metals will offset losses from the drop in Lomiko Metals' long position.| Leading Edge vs. Hannan Metals | Leading Edge vs. Mkango Resources | Leading Edge vs. Elcora Advanced Materials | Leading Edge vs. Midnight Sun Mining |
| Lomiko Metals vs. Sangoma Technologies Corp | Lomiko Metals vs. AGF Management Limited | Lomiko Metals vs. Metalero Mining Corp | Lomiko Metals vs. Altair Resources |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |