Correlation Between NEXA RESOURCES and CLEANTECH LITH

Can any of the company-specific risk be diversified away by investing in both NEXA RESOURCES and CLEANTECH LITH 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 NEXA RESOURCES and CLEANTECH LITH into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NEXA RESOURCES SA and CLEANTECH LITH LS, you can compare the effects of market volatilities on NEXA RESOURCES and CLEANTECH LITH 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 NEXA RESOURCES with a short position of CLEANTECH LITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXA RESOURCES and CLEANTECH LITH.

Diversification Opportunities for NEXA RESOURCES and CLEANTECH LITH

0.09

Correlation Coefficient

NEXA RESOURCES  CLEANTECH LITH

Significant diversification

The 3 months correlation between NEXA and CLEANTECH is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding NEXA RESOURCES SA and CLEANTECH LITH LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEANTECH LITH LS and NEXA RESOURCES 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 NEXA RESOURCES SA are associated (or correlated) with CLEANTECH LITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEANTECH LITH LS has no effect on the direction of NEXA RESOURCES i.e., NEXA RESOURCES and CLEANTECH LITH go up and down completely randomly.

Pair Corralation between NEXA RESOURCES and CLEANTECH LITH

If you would invest  18.00  in CLEANTECH LITH LS on December 5, 2024 and sell it today you would earn a total of  0.00  from holding CLEANTECH LITH LS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

NEXA RESOURCES SA  vs.  CLEANTECH LITH LS

NEXA RESOURCES SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEXA RESOURCES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

CLEANTECH LITH LS

Risk-Adjusted Performance

Very Weak

Over the last 90 days CLEANTECH LITH LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with NEXA RESOURCES and CLEANTECH LITH

The main advantage of trading using opposite NEXA RESOURCES and CLEANTECH LITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXA RESOURCES position performs unexpectedly, CLEANTECH LITH 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 LITH will offset losses from the drop in CLEANTECH LITH's long position.

The idea behind NEXA RESOURCES SA and CLEANTECH LITH LS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.