Correlation Between Leading Edge and Kancera AB
Can any of the company-specific risk be diversified away by investing in both Leading Edge and Kancera AB 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 Kancera AB 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 Kancera AB, you can compare the effects of market volatilities on Leading Edge and Kancera AB 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 Kancera AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leading Edge and Kancera AB.
Diversification Opportunities for Leading Edge and Kancera AB
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leading and Kancera is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Leading Edge Materials and Kancera AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kancera AB 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 Kancera AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kancera AB has no effect on the direction of Leading Edge i.e., Leading Edge and Kancera AB go up and down completely randomly.
Pair Corralation between Leading Edge and Kancera AB
Assuming the 90 days trading horizon Leading Edge Materials is expected to under-perform the Kancera AB. But the stock apears to be less risky and, when comparing its historical volatility, Leading Edge Materials is 1.6 times less risky than Kancera AB. The stock trades about -0.02 of its potential returns per unit of risk. The Kancera AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 285.00 in Kancera AB on August 31, 2024 and sell it today you would lose (182.00) from holding Kancera AB or give up 63.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Leading Edge Materials vs. Kancera AB
Performance |
| Timeline |
| Leading Edge Materials |
| Kancera AB |
Leading Edge and Kancera AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leading Edge and Kancera AB
The main advantage of trading using opposite Leading Edge and Kancera AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leading Edge position performs unexpectedly, Kancera AB 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 Kancera AB will offset losses from the drop in Kancera AB'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 |
| Kancera AB vs. ExpreS2ion Biotech Holding | Kancera AB vs. Hansa Biopharma AB | Kancera AB vs. Saniona AB | Kancera AB vs. Oncopeptides 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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