Correlation Between Lomiko Metals and Leading Edge
Can any of the company-specific risk be diversified away by investing in both Lomiko Metals and Leading Edge 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 Lomiko Metals and Leading Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lomiko Metals and Leading Edge Materials, you can compare the effects of market volatilities on Lomiko Metals and Leading Edge 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 Lomiko Metals with a short position of Leading Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lomiko Metals and Leading Edge.
Diversification Opportunities for Lomiko Metals and Leading Edge
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lomiko and Leading is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lomiko Metals and Leading Edge Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leading Edge Materials and Lomiko Metals 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 Lomiko Metals are associated (or correlated) with Leading Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leading Edge Materials has no effect on the direction of Lomiko Metals i.e., Lomiko Metals and Leading Edge go up and down completely randomly.
Pair Corralation between Lomiko Metals and Leading Edge
Assuming the 90 days horizon Lomiko Metals is expected to under-perform the Leading Edge. But the stock apears to be less risky and, when comparing its historical volatility, Lomiko Metals is 1.02 times less risky than Leading Edge. The stock trades about -0.12 of its potential returns per unit of risk. The Leading Edge Materials is currently generating about -0.03 of returns per unit of risk over similar time horizon. 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 |
Lomiko Metals vs. Leading Edge Materials
Performance |
| Timeline |
| Lomiko Metals |
| Leading Edge Materials |
Lomiko Metals and Leading Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lomiko Metals and Leading Edge
The main advantage of trading using opposite Lomiko Metals and Leading Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lomiko Metals position performs unexpectedly, Leading Edge 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 Leading Edge will offset losses from the drop in Leading Edge's long position.| Lomiko Metals vs. Sangoma Technologies Corp | Lomiko Metals vs. AGF Management Limited | Lomiko Metals vs. Metalero Mining Corp | Lomiko Metals vs. Altair Resources |
| Leading Edge vs. Hannan Metals | Leading Edge vs. Mkango Resources | Leading Edge vs. Elcora Advanced Materials | Leading Edge vs. Midnight Sun Mining |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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