Correlation Between Clariant and CleanTech Lithium

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

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

Diversification Opportunities for Clariant and CleanTech Lithium

-0.5

Correlation Coefficient

Clariant  CleanTech Lithium

Very good diversification

The 3 months correlation between Clariant and CleanTech is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Clariant AG 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 Clariant 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 Clariant AG 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 Clariant i.e., Clariant and CleanTech Lithium go up and down completely randomly.

Pair Corralation between Clariant and CleanTech Lithium

Assuming the 90 days trading horizon Clariant AG is expected to under-perform the CleanTech Lithium. But the stock apears to be less risky and, when comparing its historical volatility, Clariant AG is 1.73 times less risky than CleanTech Lithium. The stock trades about -0.17 of its potential returns per unit of risk. The CleanTech Lithium plc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  525.00  in CleanTech Lithium plc on August 26, 2025 and sell it today you would earn a total of  50.00  from holding CleanTech Lithium plc or generate 9.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Clariant AG  vs.  CleanTech Lithium plc

Clariant AG

Risk-Adjusted Performance

Weakest

Over the last 90 days Clariant AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CleanTech Lithium plc

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in CleanTech Lithium plc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, CleanTech Lithium may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Clariant and CleanTech Lithium

The main advantage of trading using opposite Clariant and CleanTech Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clariant 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.

The idea behind Clariant AG and CleanTech Lithium plc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.