Correlation Between CleanTech Lithium and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both CleanTech Lithium and Naturhouse Health 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 CleanTech Lithium and Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CleanTech Lithium plc and Naturhouse Health SA, you can compare the effects of market volatilities on CleanTech Lithium and Naturhouse Health 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 CleanTech Lithium with a short position of Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanTech Lithium and Naturhouse Health.
Diversification Opportunities for CleanTech Lithium and Naturhouse Health
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CleanTech and Naturhouse is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CleanTech Lithium plc and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health and CleanTech Lithium 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 CleanTech Lithium plc are associated (or correlated) with Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of CleanTech Lithium i.e., CleanTech Lithium and Naturhouse Health go up and down completely randomly.
Pair Corralation between CleanTech Lithium and Naturhouse Health
Assuming the 90 days trading horizon CleanTech Lithium plc is expected to under-perform the Naturhouse Health. In addition to that, CleanTech Lithium is 2.5 times more volatile than Naturhouse Health SA. It trades about -0.03 of its total potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.04 per unit of volatility. If you would invest 149.00 in Naturhouse Health SA on September 2, 2024 and sell it today you would earn a total of 19.00 from holding Naturhouse Health SA or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.4% |
| Values | Daily Returns |
CleanTech Lithium plc vs. Naturhouse Health SA
Performance |
| Timeline |
| CleanTech Lithium plc |
| Naturhouse Health |
CleanTech Lithium and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CleanTech Lithium and Naturhouse Health
The main advantage of trading using opposite CleanTech Lithium and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanTech Lithium position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| CleanTech Lithium vs. Givaudan SA | CleanTech Lithium vs. Antofagasta PLC | CleanTech Lithium vs. Centamin PLC | CleanTech Lithium vs. Atalaya Mining |
| Naturhouse Health vs. Uniper SE | Naturhouse Health vs. Mulberry Group PLC | Naturhouse Health vs. London Security Plc | Naturhouse Health vs. Triad Group PLC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |