Correlation Between Hansa Investment and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Hansa Investment 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 Hansa Investment and CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansa Investment and CleanTech Lithium plc, you can compare the effects of market volatilities on Hansa Investment 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 Hansa Investment with a short position of CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Investment and CleanTech Lithium.
Diversification Opportunities for Hansa Investment and CleanTech Lithium
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hansa and CleanTech is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment 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 Hansa Investment 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 Hansa Investment 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 Hansa Investment i.e., Hansa Investment and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Hansa Investment and CleanTech Lithium
Assuming the 90 days trading horizon Hansa Investment is expected to generate 0.27 times more return on investment than CleanTech Lithium. However, Hansa Investment is 3.75 times less risky than CleanTech Lithium. It trades about -0.03 of its potential returns per unit of risk. CleanTech Lithium plc is currently generating about -0.19 per unit of risk. If you would invest 22,299 in Hansa Investment on September 3, 2024 and sell it today you would lose (399.00) from holding Hansa Investment or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansa Investment vs. CleanTech Lithium plc
Performance |
| Timeline |
| Hansa Investment |
| CleanTech Lithium plc |
Hansa Investment and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Investment and CleanTech Lithium
The main advantage of trading using opposite Hansa Investment and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment 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.| Hansa Investment vs. Hansa Biopharma AB | Hansa Investment vs. Hansa Trust | Hansa Investment vs. Eastman Chemical Co | Hansa Investment vs. American Tower REIT |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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