Correlation Between Veolia Environnement and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Veolia Environnement 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 Veolia Environnement and CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veolia Environnement VE and CleanTech Lithium plc, you can compare the effects of market volatilities on Veolia Environnement 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 Veolia Environnement with a short position of CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and CleanTech Lithium.
Diversification Opportunities for Veolia Environnement and CleanTech Lithium
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Veolia and CleanTech is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement VE 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 Veolia Environnement 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 Veolia Environnement VE 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 Veolia Environnement i.e., Veolia Environnement and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Veolia Environnement and CleanTech Lithium
Assuming the 90 days trading horizon Veolia Environnement VE is expected to generate 0.21 times more return on investment than CleanTech Lithium. However, Veolia Environnement VE is 4.68 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 -0.07 per unit of risk. If you would invest 2,551 in Veolia Environnement VE on November 5, 2024 and sell it today you would earn a total of 206.00 from holding Veolia Environnement VE or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veolia Environnement VE vs. CleanTech Lithium plc
Performance |
| Timeline |
| Veolia Environnement |
| CleanTech Lithium plc |
Veolia Environnement and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veolia Environnement and CleanTech Lithium
The main advantage of trading using opposite Veolia Environnement and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement 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.| Veolia Environnement vs. Mobile Tornado Group | Veolia Environnement vs. MTI Wireless Edge | Veolia Environnement vs. St Galler Kantonalbank | Veolia Environnement vs. Sydbank |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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