Correlation Between Guaranty Trust and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Guaranty Trust 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 Guaranty Trust and CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guaranty Trust Holding and CleanTech Lithium plc, you can compare the effects of market volatilities on Guaranty Trust 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 Guaranty Trust with a short position of CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guaranty Trust and CleanTech Lithium.
Diversification Opportunities for Guaranty Trust and CleanTech Lithium
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guaranty and CleanTech is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Trust Holding 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 Guaranty Trust 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 Guaranty Trust Holding 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 Guaranty Trust i.e., Guaranty Trust and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Guaranty Trust and CleanTech Lithium
Assuming the 90 days trading horizon Guaranty Trust Holding is expected to generate 0.39 times more return on investment than CleanTech Lithium. However, Guaranty Trust Holding is 2.57 times less risky than CleanTech Lithium. It trades about 0.19 of its potential returns per unit of risk. CleanTech Lithium plc is currently generating about 0.03 per unit of risk. If you would invest 172.00 in Guaranty Trust Holding on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Guaranty Trust Holding or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guaranty Trust Holding vs. CleanTech Lithium plc
Performance |
| Timeline |
| Guaranty Trust Holding |
| CleanTech Lithium plc |
Guaranty Trust and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guaranty Trust and CleanTech Lithium
The main advantage of trading using opposite Guaranty Trust and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guaranty Trust 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.| Guaranty Trust vs. Aeorema Communications Plc | Guaranty Trust vs. Cairo Communication SpA | Guaranty Trust vs. Take Two Interactive Software | Guaranty Trust vs. Impax Asset Management |
| CleanTech Lithium vs. Hansa Investment | CleanTech Lithium vs. New Residential Investment | CleanTech Lithium vs. Odyssean Investment Trust | CleanTech Lithium vs. Livermore Investments Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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