Correlation Between Lohilo Foods and Leading Edge
Can any of the company-specific risk be diversified away by investing in both Lohilo Foods 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 Lohilo Foods and Leading Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lohilo Foods AB and Leading Edge Materials, you can compare the effects of market volatilities on Lohilo Foods 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 Lohilo Foods with a short position of Leading Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lohilo Foods and Leading Edge.
Diversification Opportunities for Lohilo Foods and Leading Edge
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lohilo and Leading is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lohilo Foods AB 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 Lohilo Foods 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 Lohilo Foods AB 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 Lohilo Foods i.e., Lohilo Foods and Leading Edge go up and down completely randomly.
Pair Corralation between Lohilo Foods and Leading Edge
Assuming the 90 days trading horizon Lohilo Foods AB is expected to under-perform the Leading Edge. In addition to that, Lohilo Foods is 1.13 times more volatile than Leading Edge Materials. It trades about -0.07 of its total potential returns per unit of risk. Leading Edge Materials is currently generating about -0.07 per unit of volatility. If you would invest 115.00 in Leading Edge Materials on September 3, 2024 and sell it today you would lose (38.00) from holding Leading Edge Materials or give up 33.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lohilo Foods AB vs. Leading Edge Materials
Performance |
| Timeline |
| Lohilo Foods AB |
| Leading Edge Materials |
Lohilo Foods and Leading Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lohilo Foods and Leading Edge
The main advantage of trading using opposite Lohilo Foods and Leading Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lohilo Foods 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.| Lohilo Foods vs. Smart Eye AB | Lohilo Foods vs. Kamux Suomi Oy | Lohilo Foods vs. Zignsec AB | Lohilo Foods vs. Harvia Oyj |
| Leading Edge vs. New Nordic Healthbrands | Leading Edge vs. Swedbank AB | Leading Edge vs. Invisio Communications AB | Leading Edge vs. SaveLend Group 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |