Correlation Between Cleveland Cliffs and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Cleveland Cliffs and CleanTech Lithium 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 Cleveland Cliffs and CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleveland Cliffs and CleanTech Lithium plc, you can compare the effects of market volatilities on Cleveland Cliffs and CleanTech Lithium 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 Cleveland Cliffs with a short position of CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleveland Cliffs and CleanTech Lithium.
Diversification Opportunities for Cleveland Cliffs and CleanTech Lithium
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cleveland and CleanTech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleveland Cliffs and CleanTech Lithium plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanTech Lithium plc and Cleveland Cliffs 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 Cleveland Cliffs are associated (or correlated) with CleanTech Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanTech Lithium plc has no effect on the direction of Cleveland Cliffs i.e., Cleveland Cliffs and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Cleveland Cliffs and CleanTech Lithium
Assuming the 90 days trading horizon Cleveland Cliffs is expected to generate 0.54 times more return on investment than CleanTech Lithium. However, Cleveland Cliffs is 1.84 times less risky than CleanTech Lithium. It trades about -0.02 of its potential returns per unit of risk. CleanTech Lithium plc is currently generating about -0.03 per unit of risk. If you would invest 1,722 in Cleveland Cliffs on September 16, 2024 and sell it today you would lose (653.00) from holding Cleveland Cliffs or give up 37.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.01% |
| Values | Daily Returns |
Cleveland Cliffs vs. CleanTech Lithium plc
Performance |
| Timeline |
| Cleveland Cliffs |
| CleanTech Lithium plc |
Cleveland Cliffs and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleveland Cliffs and CleanTech Lithium
The main advantage of trading using opposite Cleveland Cliffs and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleveland Cliffs position performs unexpectedly, CleanTech Lithium 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 CleanTech Lithium will offset losses from the drop in CleanTech Lithium's long position.| Cleveland Cliffs vs. CleanTech Lithium plc | Cleveland Cliffs vs. MTI Wireless Edge | Cleveland Cliffs vs. Allianz Technology Trust | Cleveland Cliffs vs. Ecclesiastical Insurance Office |
| CleanTech Lithium vs. Givaudan SA | CleanTech Lithium vs. Antofagasta PLC | CleanTech Lithium vs. Ferrexpo PLC | CleanTech Lithium vs. Atalaya 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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