Correlation Between Premier Foods and CleanTech Lithium
Can any of the company-specific risk be diversified away by investing in both Premier Foods 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 Premier Foods and CleanTech Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Foods PLC and CleanTech Lithium plc, you can compare the effects of market volatilities on Premier Foods 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 Premier Foods with a short position of CleanTech Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and CleanTech Lithium.
Diversification Opportunities for Premier Foods and CleanTech Lithium
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Premier and CleanTech is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods PLC 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 Premier Foods 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 Premier Foods PLC 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 Premier Foods i.e., Premier Foods and CleanTech Lithium go up and down completely randomly.
Pair Corralation between Premier Foods and CleanTech Lithium
Assuming the 90 days trading horizon Premier Foods PLC is expected to under-perform the CleanTech Lithium. But the stock apears to be less risky and, when comparing its historical volatility, Premier Foods PLC is 2.24 times less risky than CleanTech Lithium. The stock trades about -0.06 of its potential returns per unit of risk. The CleanTech Lithium plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 550.00 in CleanTech Lithium plc on August 31, 2025 and sell it today you would earn a total of 15.00 from holding CleanTech Lithium plc or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Foods PLC vs. CleanTech Lithium plc
Performance |
| Timeline |
| Premier Foods PLC |
| CleanTech Lithium plc |
Premier Foods and CleanTech Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and CleanTech Lithium
The main advantage of trading using opposite Premier Foods and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods 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.| Premier Foods vs. Lundin Mining Corp | Premier Foods vs. Charter Communications Cl | Premier Foods vs. Batm Advanced Communications | Premier Foods vs. Telecom Italia SpA |
| CleanTech Lithium vs. Hollywood Bowl Group | CleanTech Lithium vs. Air Products Chemicals | CleanTech Lithium vs. Zurich Insurance Group | CleanTech Lithium vs. Odfjell Drilling |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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