Correlation Between Leading Edge and AAC Clyde
Can any of the company-specific risk be diversified away by investing in both Leading Edge and AAC Clyde 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 AAC Clyde 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 AAC Clyde Space, you can compare the effects of market volatilities on Leading Edge and AAC Clyde 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 AAC Clyde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leading Edge and AAC Clyde.
Diversification Opportunities for Leading Edge and AAC Clyde
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leading and AAC is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Leading Edge Materials and AAC Clyde Space in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC Clyde Space 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 AAC Clyde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC Clyde Space has no effect on the direction of Leading Edge i.e., Leading Edge and AAC Clyde go up and down completely randomly.
Pair Corralation between Leading Edge and AAC Clyde
Assuming the 90 days trading horizon Leading Edge Materials is expected to under-perform the AAC Clyde. But the stock apears to be less risky and, when comparing its historical volatility, Leading Edge Materials is 9.6 times less risky than AAC Clyde. The stock trades about 0.0 of its potential returns per unit of risk. The AAC Clyde Space is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 159.00 in AAC Clyde Space on August 28, 2024 and sell it today you would earn a total of 4,336 from holding AAC Clyde Space or generate 2727.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leading Edge Materials vs. AAC Clyde Space
Performance |
| Timeline |
| Leading Edge Materials |
| AAC Clyde Space |
Leading Edge and AAC Clyde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leading Edge and AAC Clyde
The main advantage of trading using opposite Leading Edge and AAC Clyde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leading Edge position performs unexpectedly, AAC Clyde 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 AAC Clyde will offset losses from the drop in AAC Clyde's long position.| Leading Edge vs. Boliden AB | Leading Edge vs. KABE Group AB | Leading Edge vs. IAR Systems Group | Leading Edge vs. Norva24 Group AB |
| AAC Clyde vs. GomSpace Group AB | AAC Clyde vs. Eolus Vind AB | AAC Clyde vs. Fingerprint Cards AB | AAC Clyde vs. SaltX Technology Holding |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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