Correlation Between Leading Edge and Beowulf Mining

Can any of the company-specific risk be diversified away by investing in both Leading Edge and Beowulf Mining 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 Beowulf Mining 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 Beowulf Mining PLC, you can compare the effects of market volatilities on Leading Edge and Beowulf Mining 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 Beowulf Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leading Edge and Beowulf Mining.

Diversification Opportunities for Leading Edge and Beowulf Mining

0.04

Correlation Coefficient

Leading Edge  Beowulf Mining

Significant diversification

The 3 months correlation between Leading and Beowulf is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Leading Edge Materials and Beowulf Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beowulf Mining PLC 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 Beowulf Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beowulf Mining PLC has no effect on the direction of Leading Edge i.e., Leading Edge and Beowulf Mining go up and down completely randomly.

Pair Corralation between Leading Edge and Beowulf Mining

Assuming the 90 days trading horizon Leading Edge Materials is expected to under-perform the Beowulf Mining. In addition to that, Leading Edge is 1.34 times more volatile than Beowulf Mining PLC. It trades about -0.13 of its total potential returns per unit of risk. Beowulf Mining PLC is currently generating about -0.03 per unit of volatility. If you would invest  160.00  in Beowulf Mining PLC on April 23, 2025 and sell it today you would lose (15.00) from holding Beowulf Mining PLC or give up 9.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Leading Edge Materials  vs.  Beowulf Mining PLC

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 weak 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.

Beowulf Mining PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beowulf Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Leading Edge and Beowulf Mining

The main advantage of trading using opposite Leading Edge and Beowulf Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leading Edge position performs unexpectedly, Beowulf Mining 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 Beowulf Mining will offset losses from the drop in Beowulf Mining's long position.

The idea behind Leading Edge Materials and Beowulf Mining PLC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.