Correlation Between SilverCrest Metals and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both SilverCrest Metals 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 SilverCrest Metals and CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SilverCrest Metals and CleanTech Lithium plc, you can compare the effects of market volatilities on SilverCrest Metals 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 SilverCrest Metals with a short position of CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverCrest Metals and CleanTech Lithium.
Diversification Opportunities for SilverCrest Metals and CleanTech Lithium
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SilverCrest and CleanTech is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals i.e., SilverCrest Metals and CleanTech Lithium go up and down completely randomly.
Pair Corralation between SilverCrest Metals and CleanTech Lithium
Assuming the 90 days trading horizon SilverCrest Metals is expected to generate 0.91 times more return on investment than CleanTech Lithium. However, SilverCrest Metals is 1.1 times less risky than CleanTech Lithium. It trades about 0.08 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 807.00 in SilverCrest Metals on September 3, 2024 and sell it today you would earn a total of 614.00 from holding SilverCrest Metals or generate 76.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 41.37% |
| Values | Daily Returns |
SilverCrest Metals vs. CleanTech Lithium plc
Performance |
| Timeline |
| SilverCrest Metals |
| CleanTech Lithium plc |
SilverCrest Metals and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SilverCrest Metals and CleanTech Lithium
The main advantage of trading using opposite SilverCrest Metals and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverCrest Metals 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.| SilverCrest Metals vs. CleanTech Lithium plc | SilverCrest Metals vs. Medical Properties Trust | SilverCrest Metals vs. Ameriprise Financial | SilverCrest Metals vs. Melia Hotels |
| CleanTech Lithium vs. Givaudan SA | CleanTech Lithium vs. Atalaya Mining | CleanTech Lithium vs. Central Asia Metals |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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