Correlation Between CleanTech Lithium and Trellus Health
Can any of the company-specific risk be diversified away by investing in both CleanTech Lithium and Trellus Health 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 Trellus Health 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 Trellus Health plc, you can compare the effects of market volatilities on CleanTech Lithium and Trellus Health 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 Trellus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanTech Lithium and Trellus Health.
Diversification Opportunities for CleanTech Lithium and Trellus Health
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CleanTech and Trellus is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CleanTech Lithium plc and Trellus Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trellus Health 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 Trellus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trellus Health plc has no effect on the direction of CleanTech Lithium i.e., CleanTech Lithium and Trellus Health go up and down completely randomly.
Pair Corralation between CleanTech Lithium and Trellus Health
Assuming the 90 days trading horizon CleanTech Lithium plc is expected to under-perform the Trellus Health. But the stock apears to be less risky and, when comparing its historical volatility, CleanTech Lithium plc is 39.58 times less risky than Trellus Health. The stock trades about -0.04 of its potential returns per unit of risk. The Trellus Health plc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Trellus Health plc on October 25, 2024 and sell it today you would earn a total of 178.00 from holding Trellus Health plc or generate 312.28% 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. Trellus Health plc
Performance |
| Timeline |
| CleanTech Lithium plc |
| Trellus Health plc |
CleanTech Lithium and Trellus Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CleanTech Lithium and Trellus Health
The main advantage of trading using opposite CleanTech Lithium and Trellus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CleanTech Lithium position performs unexpectedly, Trellus Health 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 Trellus Health will offset losses from the drop in Trellus Health's long position.| CleanTech Lithium vs. Zegona Communications Plc | CleanTech Lithium vs. Roadside Real Estate | CleanTech Lithium vs. mobilezone holding AG | CleanTech Lithium vs. Zoom Video Communications |
| Trellus Health vs. SupplyMe Capital PLC | Trellus Health vs. SM Energy Co | Trellus Health vs. FuelCell Energy | Trellus Health vs. Grand Vision Media |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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