Correlation Between CleanTech Lithium and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both CleanTech Lithium and Concurrent Technologies 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 Concurrent Technologies 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 Concurrent Technologies Plc, you can compare the effects of market volatilities on CleanTech Lithium and Concurrent Technologies 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 Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanTech Lithium and Concurrent Technologies.
Diversification Opportunities for CleanTech Lithium and Concurrent Technologies
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CleanTech and Concurrent is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CleanTech Lithium plc and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies 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 Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of CleanTech Lithium i.e., CleanTech Lithium and Concurrent Technologies go up and down completely randomly.
Pair Corralation between CleanTech Lithium and Concurrent Technologies
Assuming the 90 days trading horizon CleanTech Lithium plc is expected to under-perform the Concurrent Technologies. In addition to that, CleanTech Lithium is 2.17 times more volatile than Concurrent Technologies Plc. It trades about -0.09 of its total potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.12 per unit of volatility. If you would invest 10,102 in Concurrent Technologies Plc on September 1, 2024 and sell it today you would earn a total of 4,298 from holding Concurrent Technologies Plc or generate 42.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CleanTech Lithium plc vs. Concurrent Technologies Plc
Performance |
| Timeline |
| CleanTech Lithium plc |
| Concurrent Technologies |
CleanTech Lithium and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CleanTech Lithium and Concurrent Technologies
The main advantage of trading using opposite CleanTech Lithium and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanTech Lithium position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.| CleanTech Lithium vs. Hansa Investment | CleanTech Lithium vs. New Residential Investment | CleanTech Lithium vs. Odyssean Investment Trust | CleanTech Lithium vs. Livermore Investments Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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