Correlation Between Integrum and Leading Edge

Can any of the company-specific risk be diversified away by investing in both Integrum 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 Integrum and Leading Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integrum AB Series and Leading Edge Materials, you can compare the effects of market volatilities on Integrum 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 Integrum with a short position of Leading Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrum and Leading Edge.

Diversification Opportunities for Integrum and Leading Edge

-0.56

Correlation Coefficient

Integrum  Leading Edge

Excellent diversification

The 3 months correlation between Integrum and Leading is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Integrum AB Series 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 Integrum 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 Integrum AB Series 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 Integrum i.e., Integrum and Leading Edge go up and down completely randomly.

Pair Corralation between Integrum and Leading Edge

Assuming the 90 days trading horizon Integrum AB Series is expected to generate 1.21 times more return on investment than Leading Edge. However, Integrum is 1.21 times more volatile than Leading Edge Materials. It trades about 0.05 of its potential returns per unit of risk. Leading Edge Materials is currently generating about 0.03 per unit of risk. If you would invest  1,950  in Integrum AB Series on April 24, 2025 and sell it today you would earn a total of  2,170  from holding Integrum AB Series or generate 111.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Integrum AB Series  vs.  Leading Edge Materials

Integrum AB Series

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Integrum AB Series are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Integrum sustained solid returns over the last few months and may actually be approaching a breakup point.

Leading Edge Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leading Edge Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Integrum and Leading Edge

The main advantage of trading using opposite Integrum and Leading Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrum 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.

The idea behind Integrum AB Series and Leading Edge Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.