Correlation Between CleanTech Lithium and TBC Bank
Can any of the company-specific risk be diversified away by investing in both CleanTech Lithium and TBC Bank 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 TBC Bank 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 TBC Bank Group, you can compare the effects of market volatilities on CleanTech Lithium and TBC Bank 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 TBC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanTech Lithium and TBC Bank.
Diversification Opportunities for CleanTech Lithium and TBC Bank
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between CleanTech and TBC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CleanTech Lithium plc and TBC Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBC Bank Group 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 TBC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBC Bank Group has no effect on the direction of CleanTech Lithium i.e., CleanTech Lithium and TBC Bank go up and down completely randomly.
Pair Corralation between CleanTech Lithium and TBC Bank
Assuming the 90 days trading horizon CleanTech Lithium plc is expected to under-perform the TBC Bank. In addition to that, CleanTech Lithium is 3.05 times more volatile than TBC Bank Group. It trades about -0.04 of its total potential returns per unit of risk. TBC Bank Group is currently generating about 0.11 per unit of volatility. If you would invest 311,000 in TBC Bank Group on October 29, 2024 and sell it today you would earn a total of 9,000 from holding TBC Bank Group or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CleanTech Lithium plc vs. TBC Bank Group
Performance |
| Timeline |
| CleanTech Lithium plc |
| TBC Bank Group |
CleanTech Lithium and TBC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CleanTech Lithium and TBC Bank
The main advantage of trading using opposite CleanTech Lithium and TBC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanTech Lithium position performs unexpectedly, TBC Bank 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 TBC Bank will offset losses from the drop in TBC Bank's long position.| CleanTech Lithium vs. InterContinental Hotels Group | CleanTech Lithium vs. Lundin Mining Corp | CleanTech Lithium vs. Aeorema Communications Plc | CleanTech Lithium vs. Beowulf Mining |
| TBC Bank vs. Waste Management | TBC Bank vs. Martin Marietta Materials | TBC Bank vs. Ecclesiastical Insurance Office | TBC Bank vs. Summit Materials Cl |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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