Correlation Between Leading Edge and OMX Stockholm
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By analyzing existing cross correlation between Leading Edge Materials and OMX Stockholm Mid, you can compare the effects of market volatilities on Leading Edge and OMX Stockholm 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 OMX Stockholm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leading Edge and OMX Stockholm.
Diversification Opportunities for Leading Edge and OMX Stockholm
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Leading and OMX is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Leading Edge Materials and OMX Stockholm Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMX Stockholm Mid 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 OMX Stockholm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMX Stockholm Mid has no effect on the direction of Leading Edge i.e., Leading Edge and OMX Stockholm go up and down completely randomly.
Pair Corralation between Leading Edge and OMX Stockholm
Assuming the 90 days trading horizon Leading Edge Materials is expected to generate 11.83 times more return on investment than OMX Stockholm. However, Leading Edge is 11.83 times more volatile than OMX Stockholm Mid. It trades about 0.41 of its potential returns per unit of risk. OMX Stockholm Mid is currently generating about 0.29 per unit of risk. If you would invest 74.00 in Leading Edge Materials on November 28, 2024 and sell it today you would earn a total of 75.00 from holding Leading Edge Materials or generate 101.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leading Edge Materials vs. OMX Stockholm Mid
Performance |
| Timeline |
Leading Edge and OMX Stockholm Volatility Contrast
Predicted Return Density |
| Returns |
Leading Edge Materials
Pair trading matchups for Leading Edge
OMX Stockholm Mid
Pair trading matchups for OMX Stockholm
Pair Trading with Leading Edge and OMX Stockholm
The main advantage of trading using opposite Leading Edge and OMX Stockholm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leading Edge position performs unexpectedly, OMX Stockholm 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 OMX Stockholm will offset losses from the drop in OMX Stockholm's long position.| Leading Edge vs. TF Bank AB | Leading Edge vs. High Coast Distillery | Leading Edge vs. Svenska Handelsbanken AB | Leading Edge vs. OptiCept Technologies AB |
| OMX Stockholm vs. Nordea Bank Abp | OMX Stockholm vs. Media and Games | OMX Stockholm vs. Nitro Games Oyj | OMX Stockholm vs. Vitec Software Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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