Correlation Between Oxford Technology and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Oxford Technology 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 Oxford Technology and CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Technology 2 and CleanTech Lithium plc, you can compare the effects of market volatilities on Oxford Technology 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 Oxford Technology with a short position of CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Technology and CleanTech Lithium.
Diversification Opportunities for Oxford Technology and CleanTech Lithium
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oxford and CleanTech is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Technology 2 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 Oxford Technology 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 Oxford Technology 2 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 Oxford Technology i.e., Oxford Technology and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Oxford Technology and CleanTech Lithium
If you would invest 700.00 in Oxford Technology 2 on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Oxford Technology 2 or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Oxford Technology 2 vs. CleanTech Lithium plc
Performance |
| Timeline |
| Oxford Technology |
| CleanTech Lithium plc |
Oxford Technology and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Technology and CleanTech Lithium
The main advantage of trading using opposite Oxford Technology and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Technology 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.| Oxford Technology vs. CleanTech Lithium plc | Oxford Technology vs. Orient Telecoms | Oxford Technology vs. Zegona Communications Plc | Oxford Technology vs. Scandinavian Tobacco Group |
| CleanTech Lithium vs. Odfjell Drilling | CleanTech Lithium vs. Tata Steel Limited | CleanTech Lithium vs. Home Depot | CleanTech Lithium vs. Symphony Environmental Technologies |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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