Correlation Between CleanTech Lithium and ACG Acquisition
Can any of the company-specific risk be diversified away by investing in both CleanTech Lithium and ACG Acquisition 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 ACG Acquisition 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 ACG Acquisition Co, you can compare the effects of market volatilities on CleanTech Lithium and ACG Acquisition 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 ACG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanTech Lithium and ACG Acquisition.
Diversification Opportunities for CleanTech Lithium and ACG Acquisition
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CleanTech and ACG is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CleanTech Lithium plc and ACG Acquisition Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACG Acquisition 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 ACG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACG Acquisition has no effect on the direction of CleanTech Lithium i.e., CleanTech Lithium and ACG Acquisition go up and down completely randomly.
Pair Corralation between CleanTech Lithium and ACG Acquisition
If you would invest 510.00 in ACG Acquisition Co on September 12, 2024 and sell it today you would earn a total of 0.00 from holding ACG Acquisition Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
CleanTech Lithium plc vs. ACG Acquisition Co
Performance |
| Timeline |
| CleanTech Lithium plc |
| ACG Acquisition |
CleanTech Lithium and ACG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CleanTech Lithium and ACG Acquisition
The main advantage of trading using opposite CleanTech Lithium and ACG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanTech Lithium position performs unexpectedly, ACG Acquisition 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 ACG Acquisition will offset losses from the drop in ACG Acquisition's long position.| CleanTech Lithium vs. Givaudan SA | CleanTech Lithium vs. Antofagasta PLC | CleanTech Lithium vs. Ferrexpo PLC | CleanTech Lithium vs. Atalaya Mining |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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