Correlation Between NYSE Composite and Themes Lithium
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Themes 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 NYSE Composite and Themes Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Themes Lithium Battery, you can compare the effects of market volatilities on NYSE Composite and Themes 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 NYSE Composite with a short position of Themes Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Themes Lithium.
Diversification Opportunities for NYSE Composite and Themes Lithium
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Themes is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Themes Lithium Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Lithium Battery and NYSE Composite 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 NYSE Composite are associated (or correlated) with Themes Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Lithium Battery has no effect on the direction of NYSE Composite i.e., NYSE Composite and Themes Lithium go up and down completely randomly.
Pair Corralation between NYSE Composite and Themes Lithium
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.45 times less return on investment than Themes Lithium. But when comparing it to its historical volatility, NYSE Composite is 4.6 times less risky than Themes Lithium. It trades about 0.13 of its potential returns per unit of risk. Themes Lithium Battery is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,684 in Themes Lithium Battery on August 25, 2024 and sell it today you would earn a total of 421.00 from holding Themes Lithium Battery or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.75% |
| Values | Daily Returns |
NYSE Composite vs. Themes Lithium Battery
Performance |
| Timeline |
NYSE Composite and Themes Lithium Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Themes Lithium Battery
Pair trading matchups for Themes Lithium
Pair Trading with NYSE Composite and Themes Lithium
The main advantage of trading using opposite NYSE Composite and Themes Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Themes 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 Themes Lithium will offset losses from the drop in Themes Lithium's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Themes Lithium vs. First Trust Exchange Traded | Themes Lithium vs. Ultimus Managers Trust | Themes Lithium vs. Horizon Kinetics Medical | Themes Lithium vs. Harbor Health Care |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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