Correlation Between Ferrexpo PLC and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and CleanTech Lithium 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 Ferrexpo PLC and CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and CleanTech Lithium plc, you can compare the effects of market volatilities on Ferrexpo PLC and CleanTech Lithium 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 Ferrexpo PLC with a short position of CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and CleanTech Lithium.
Diversification Opportunities for Ferrexpo PLC and CleanTech Lithium
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ferrexpo and CleanTech is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and CleanTech Lithium plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanTech Lithium plc and Ferrexpo PLC 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 Ferrexpo PLC are associated (or correlated) with CleanTech Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanTech Lithium plc has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and CleanTech Lithium
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 0.97 times more return on investment than CleanTech Lithium. However, Ferrexpo PLC is 1.03 times less risky than CleanTech Lithium. It trades about 0.09 of its potential returns per unit of risk. CleanTech Lithium plc is currently generating about -0.08 per unit of risk. If you would invest 4,995 in Ferrexpo PLC on September 3, 2024 and sell it today you would earn a total of 3,135 from holding Ferrexpo PLC or generate 62.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferrexpo PLC vs. CleanTech Lithium plc
Performance |
| Timeline |
| Ferrexpo PLC |
| CleanTech Lithium plc |
Ferrexpo PLC and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and CleanTech Lithium
The main advantage of trading using opposite Ferrexpo PLC and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, CleanTech Lithium 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 CleanTech Lithium will offset losses from the drop in CleanTech Lithium's long position.| Ferrexpo PLC vs. The Investment | Ferrexpo PLC vs. Odyssean Investment Trust | Ferrexpo PLC vs. Lowland Investment Co | Ferrexpo PLC vs. Monster Beverage Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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