Correlation Between Superior Plus and CLEANTECH LITH
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and CLEANTECH LITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and CLEANTECH LITH LS, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of CLEANTECH LITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and CLEANTECH LITH.
Diversification Opportunities for Superior Plus and CLEANTECH LITH
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and CLEANTECH is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and CLEANTECH LITH go up and down completely randomly.
Pair Corralation between Superior Plus and CLEANTECH LITH
Assuming the 90 days horizon Superior Plus is expected to generate 3.52 times less return on investment than CLEANTECH LITH. But when comparing it to its historical volatility, Superior Plus Corp is 2.62 times less risky than CLEANTECH LITH. It trades about 0.08 of its potential returns per unit of risk. CLEANTECH LITH LS is currently generating about 0.1 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. CLEANTECH LITH LS
Performance |
| Timeline |
| Superior Plus Corp |
| CLEANTECH LITH LS |
Superior Plus and CLEANTECH LITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and CLEANTECH LITH
The main advantage of trading using opposite Superior Plus and CLEANTECH LITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. Nissan Chemical Corp | Superior Plus vs. Japan Medical Dynamic | Superior Plus vs. Sanyo Chemical Industries | Superior Plus vs. MeVis Medical Solutions |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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