Correlation Between Adriatic Metals and CLEANTECH LITH
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals and CLEANTECH LITH 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 Adriatic Metals and CLEANTECH LITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals Plc and CLEANTECH LITH LS, you can compare the effects of market volatilities on Adriatic Metals and CLEANTECH LITH 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 Adriatic Metals with a short position of CLEANTECH LITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and CLEANTECH LITH.
Diversification Opportunities for Adriatic Metals and CLEANTECH LITH
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adriatic and CLEANTECH is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals Plc and CLEANTECH LITH LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEANTECH LITH LS and Adriatic 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 Adriatic Metals Plc are associated (or correlated) with CLEANTECH LITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEANTECH LITH LS has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and CLEANTECH LITH go up and down completely randomly.
Pair Corralation between Adriatic Metals and CLEANTECH LITH
Assuming the 90 days horizon Adriatic Metals is expected to generate 2.77 times less return on investment than CLEANTECH LITH. But when comparing it to its historical volatility, Adriatic Metals Plc is 1.0 times less risky than CLEANTECH LITH. It trades about 0.07 of its potential returns per unit of risk. CLEANTECH LITH LS is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 19.00 in CLEANTECH LITH LS on September 15, 2024 and sell it today you would earn a total of 2.00 from holding CLEANTECH LITH LS or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Adriatic Metals Plc vs. CLEANTECH LITH LS
Performance |
| Timeline |
| Adriatic Metals Plc |
| CLEANTECH LITH LS |
Adriatic Metals and CLEANTECH LITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and CLEANTECH LITH
The main advantage of trading using opposite Adriatic Metals and CLEANTECH LITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals position performs unexpectedly, CLEANTECH LITH 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 LITH will offset losses from the drop in CLEANTECH LITH's long position.| Adriatic Metals vs. Summit Materials | Adriatic Metals vs. Haier Smart Home | Adriatic Metals vs. Hyster Yale Materials Handling | Adriatic Metals vs. APPLIED MATERIALS |
| CLEANTECH LITH vs. American Lithium Corp | CLEANTECH LITH vs. ADRIATIC METALS LS 013355 | CLEANTECH LITH vs. Superior Plus Corp | CLEANTECH LITH vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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