Correlation Between Leading Edge and SaltX Technology
Can any of the company-specific risk be diversified away by investing in both Leading Edge and SaltX Technology 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 SaltX Technology 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 SaltX Technology Holding, you can compare the effects of market volatilities on Leading Edge and SaltX Technology 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 SaltX Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leading Edge and SaltX Technology.
Diversification Opportunities for Leading Edge and SaltX Technology
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leading and SaltX is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Leading Edge Materials and SaltX Technology Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SaltX Technology Holding 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 SaltX Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SaltX Technology Holding has no effect on the direction of Leading Edge i.e., Leading Edge and SaltX Technology go up and down completely randomly.
Pair Corralation between Leading Edge and SaltX Technology
Assuming the 90 days trading horizon Leading Edge Materials is expected to generate 0.85 times more return on investment than SaltX Technology. However, Leading Edge Materials is 1.18 times less risky than SaltX Technology. It trades about 0.05 of its potential returns per unit of risk. SaltX Technology Holding is currently generating about 0.01 per unit of risk. If you would invest 110.00 in Leading Edge Materials on November 28, 2024 and sell it today you would earn a total of 27.00 from holding Leading Edge Materials or generate 24.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leading Edge Materials vs. SaltX Technology Holding
Performance |
| Timeline |
| Leading Edge Materials |
| SaltX Technology Holding |
Leading Edge and SaltX Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leading Edge and SaltX Technology
The main advantage of trading using opposite Leading Edge and SaltX Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leading Edge position performs unexpectedly, SaltX Technology 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 SaltX Technology will offset losses from the drop in SaltX Technology'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 |
| SaltX Technology vs. GomSpace Group AB | SaltX Technology vs. Fingerprint Cards AB | SaltX Technology vs. Maha Energy AB | SaltX Technology vs. SolTech Energy Sweden |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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