Correlation Between Cleantech Power and Lion One

Can any of the company-specific risk be diversified away by investing in both Cleantech Power and Lion One 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 Cleantech Power and Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cleantech Power Corp and Lion One Metals, you can compare the effects of market volatilities on Cleantech Power and Lion One 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 Cleantech Power with a short position of Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleantech Power and Lion One.

Diversification Opportunities for Cleantech Power and Lion One

0.0

Correlation Coefficient

Cleantech Power  Lion One

Pay attention - limited upside

The 3 months correlation between Cleantech and Lion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleantech Power Corp and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals and Cleantech Power 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 Cleantech Power Corp are associated (or correlated) with Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of Cleantech Power i.e., Cleantech Power and Lion One go up and down completely randomly.

Pair Corralation between Cleantech Power and Lion One

If you would invest  19.00  in Lion One Metals on October 12, 2024 and sell it today you would earn a total of  2.00  from holding Lion One Metals or generate 10.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cleantech Power Corp  vs.  Lion One Metals

Cleantech Power Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cleantech Power Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cleantech Power is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Lion One Metals

Risk-Adjusted Performance

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Very Weak

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

Pair Trading with Cleantech Power and Lion One

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

The idea behind Cleantech Power Corp and Lion One Metals 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.