Correlation Between CleanTech Lithium and Starfleet Innotech

Can any of the company-specific risk be diversified away by investing in both CleanTech Lithium and Starfleet Innotech 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 Lithium and Starfleet Innotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CleanTech Lithium Plc and Starfleet Innotech, you can compare the effects of market volatilities on CleanTech Lithium and Starfleet Innotech 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 Lithium with a short position of Starfleet Innotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of CleanTech Lithium and Starfleet Innotech.

Diversification Opportunities for CleanTech Lithium and Starfleet Innotech

-0.21

Correlation Coefficient

CleanTech Lithium  Starfleet Innotech

Very good diversification

The 3 months correlation between CleanTech and Starfleet is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding CleanTech Lithium Plc and Starfleet Innotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starfleet Innotech and CleanTech Lithium 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 Lithium Plc are associated (or correlated) with Starfleet Innotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starfleet Innotech has no effect on the direction of CleanTech Lithium i.e., CleanTech Lithium and Starfleet Innotech go up and down completely randomly.

Pair Corralation between CleanTech Lithium and Starfleet Innotech

Assuming the 90 days horizon CleanTech Lithium Plc is expected to generate 0.36 times more return on investment than Starfleet Innotech. However, CleanTech Lithium Plc is 2.8 times less risky than Starfleet Innotech. It trades about 0.12 of its potential returns per unit of risk. Starfleet Innotech is currently generating about -0.02 per unit of risk. If you would invest  8.00  in CleanTech Lithium Plc on September 5, 2025 and sell it today you would earn a total of  2.00  from holding CleanTech Lithium Plc or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

CleanTech Lithium Plc  vs.  Starfleet Innotech

CleanTech Lithium Plc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in CleanTech Lithium Plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, CleanTech Lithium reported solid returns over the last few months and may actually be approaching a breakup point.

Starfleet Innotech

Risk-Adjusted Performance

Weakest

Over the last 90 days Starfleet Innotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with CleanTech Lithium and Starfleet Innotech

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

The idea behind CleanTech Lithium Plc and Starfleet Innotech 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.