Correlation Between CleanTech Lithium and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both CleanTech Lithium and Liontrust Asset 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 Liontrust Asset 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 Liontrust Asset Management, you can compare the effects of market volatilities on CleanTech Lithium and Liontrust Asset 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 Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanTech Lithium and Liontrust Asset.
Diversification Opportunities for CleanTech Lithium and Liontrust Asset
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CleanTech and Liontrust is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding CleanTech Lithium plc and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana 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 Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of CleanTech Lithium i.e., CleanTech Lithium and Liontrust Asset go up and down completely randomly.
Pair Corralation between CleanTech Lithium and Liontrust Asset
Assuming the 90 days trading horizon CleanTech Lithium plc is expected to under-perform the Liontrust Asset. But the stock apears to be less risky and, when comparing its historical volatility, CleanTech Lithium plc is 1.1 times less risky than Liontrust Asset. The stock trades about -0.5 of its potential returns per unit of risk. The Liontrust Asset Management is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 44,962 in Liontrust Asset Management on September 25, 2024 and sell it today you would earn a total of 738.00 from holding Liontrust Asset Management or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
CleanTech Lithium plc vs. Liontrust Asset Management
Performance |
| Timeline |
| CleanTech Lithium plc |
| Liontrust Asset Mana |
CleanTech Lithium and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CleanTech Lithium and Liontrust Asset
The main advantage of trading using opposite CleanTech Lithium and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanTech Lithium position performs unexpectedly, Liontrust Asset 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 Liontrust Asset will offset losses from the drop in Liontrust Asset's long position.| CleanTech Lithium vs. Givaudan SA | CleanTech Lithium vs. Antofagasta PLC | CleanTech Lithium vs. Ferrexpo PLC | CleanTech Lithium vs. Atalaya Mining |
| Liontrust Asset vs. Cembra Money Bank | Liontrust Asset vs. CleanTech Lithium plc | Liontrust Asset vs. AfriTin Mining | Liontrust Asset vs. OneSavings Bank 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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