Correlation Between CleanTech Lithium and Admiral Group
Can any of the company-specific risk be diversified away by investing in both CleanTech Lithium and Admiral Group 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 Admiral Group 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 Admiral Group PLC, you can compare the effects of market volatilities on CleanTech Lithium and Admiral Group 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 Admiral Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanTech Lithium and Admiral Group.
Diversification Opportunities for CleanTech Lithium and Admiral Group
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CleanTech and Admiral is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CleanTech Lithium plc and Admiral Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Admiral Group PLC 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 Admiral Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Admiral Group PLC has no effect on the direction of CleanTech Lithium i.e., CleanTech Lithium and Admiral Group go up and down completely randomly.
Pair Corralation between CleanTech Lithium and Admiral Group
Assuming the 90 days trading horizon CleanTech Lithium plc is expected to generate 3.79 times more return on investment than Admiral Group. However, CleanTech Lithium is 3.79 times more volatile than Admiral Group PLC. It trades about 0.05 of its potential returns per unit of risk. Admiral Group PLC is currently generating about -0.15 per unit of risk. If you would invest 1,900 in CleanTech Lithium plc on August 30, 2024 and sell it today you would earn a total of 50.00 from holding CleanTech Lithium plc or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CleanTech Lithium plc vs. Admiral Group PLC
Performance |
| Timeline |
| CleanTech Lithium plc |
| Admiral Group PLC |
CleanTech Lithium and Admiral Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CleanTech Lithium and Admiral Group
The main advantage of trading using opposite CleanTech Lithium and Admiral Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanTech Lithium position performs unexpectedly, Admiral Group 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 Admiral Group will offset losses from the drop in Admiral Group's long position.| CleanTech Lithium vs. Electronic Arts | CleanTech Lithium vs. Federal Realty Investment | CleanTech Lithium vs. LPKF Laser Electronics | CleanTech Lithium vs. Monks Investment Trust |
| Admiral Group vs. Power Metal Resources | Admiral Group vs. Fulcrum Metals PLC | Admiral Group vs. AMG Advanced Metallurgical | Admiral Group vs. Wheaton Precious Metals |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |