Correlation Between CleanTech Lithium and Craven House
Can any of the company-specific risk be diversified away by investing in both CleanTech Lithium and Craven House 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 Craven House 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 Craven House Capital, you can compare the effects of market volatilities on CleanTech Lithium and Craven House 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 Craven House. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanTech Lithium and Craven House.
Diversification Opportunities for CleanTech Lithium and Craven House
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CleanTech and Craven is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CleanTech Lithium plc and Craven House Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Craven House Capital 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 Craven House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Craven House Capital has no effect on the direction of CleanTech Lithium i.e., CleanTech Lithium and Craven House go up and down completely randomly.
Pair Corralation between CleanTech Lithium and Craven House
Assuming the 90 days trading horizon CleanTech Lithium plc is expected to under-perform the Craven House. But the stock apears to be less risky and, when comparing its historical volatility, CleanTech Lithium plc is 1.54 times less risky than Craven House. The stock trades about -0.04 of its potential returns per unit of risk. The Craven House Capital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8.50 in Craven House Capital on September 3, 2024 and sell it today you would earn a total of 16.50 from holding Craven House Capital or generate 194.12% 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. Craven House Capital
Performance |
| Timeline |
| CleanTech Lithium plc |
| Craven House Capital |
CleanTech Lithium and Craven House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CleanTech Lithium and Craven House
The main advantage of trading using opposite CleanTech Lithium and Craven House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanTech Lithium position performs unexpectedly, Craven House 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 Craven House will offset losses from the drop in Craven House's long position.| CleanTech Lithium vs. Beazer Homes USA | CleanTech Lithium vs. Creo Medical Group | CleanTech Lithium vs. Bloomsbury Publishing Plc | CleanTech Lithium vs. Melia Hotels |
| Craven House vs. Allianz Technology Trust | Craven House vs. Verizon Communications | Craven House vs. Charter Communications Cl | Craven House vs. Ashtead Technology Holdings |
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.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |