Correlation Between Cairn Homes and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Cairn Homes 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 Cairn Homes and CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairn Homes PLC and CleanTech Lithium plc, you can compare the effects of market volatilities on Cairn Homes 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 Cairn Homes with a short position of CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and CleanTech Lithium.
Diversification Opportunities for Cairn Homes and CleanTech Lithium
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cairn and CleanTech is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC 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 Cairn Homes 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 Cairn Homes PLC 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 Cairn Homes i.e., Cairn Homes and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Cairn Homes and CleanTech Lithium
Assuming the 90 days trading horizon Cairn Homes PLC is expected to under-perform the CleanTech Lithium. But the stock apears to be less risky and, when comparing its historical volatility, Cairn Homes PLC is 2.63 times less risky than CleanTech Lithium. The stock trades about -0.2 of its potential returns per unit of risk. The CleanTech Lithium plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,700 in CleanTech Lithium plc on October 31, 2024 and sell it today you would earn a total of 50.00 from holding CleanTech Lithium plc or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairn Homes PLC vs. CleanTech Lithium plc
Performance |
| Timeline |
| Cairn Homes PLC |
| CleanTech Lithium plc |
Cairn Homes and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairn Homes and CleanTech Lithium
The main advantage of trading using opposite Cairn Homes and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes 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.| Cairn Homes vs. Flow Traders NV | Cairn Homes vs. Taiwan Semiconductor Manufacturing | Cairn Homes vs. New Residential Investment | Cairn Homes vs. Telecom Italia SpA |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |