Correlation Between Pinnacle Sherman and LiCycle Holdings
Can any of the company-specific risk be diversified away by investing in both Pinnacle Sherman and LiCycle Holdings 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 Pinnacle Sherman and LiCycle Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Sherman Multi Strategy and LiCycle Holdings Corp, you can compare the effects of market volatilities on Pinnacle Sherman and LiCycle Holdings 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 Pinnacle Sherman with a short position of LiCycle Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Sherman and LiCycle Holdings.
Diversification Opportunities for Pinnacle Sherman and LiCycle Holdings
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pinnacle and LiCycle is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Sherman Multi Strateg and LiCycle Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiCycle Holdings Corp and Pinnacle Sherman 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 Pinnacle Sherman Multi Strategy are associated (or correlated) with LiCycle Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiCycle Holdings Corp has no effect on the direction of Pinnacle Sherman i.e., Pinnacle Sherman and LiCycle Holdings go up and down completely randomly.
Pair Corralation between Pinnacle Sherman and LiCycle Holdings
Assuming the 90 days horizon Pinnacle Sherman is expected to generate 3.18 times less return on investment than LiCycle Holdings. But when comparing it to its historical volatility, Pinnacle Sherman Multi Strategy is 13.72 times less risky than LiCycle Holdings. It trades about 0.34 of its potential returns per unit of risk. LiCycle Holdings Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 203.00 in LiCycle Holdings Corp on August 30, 2024 and sell it today you would earn a total of 14.00 from holding LiCycle Holdings Corp or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Sherman Multi Strateg vs. LiCycle Holdings Corp
Performance |
| Timeline |
| Pinnacle Sherman Multi |
| LiCycle Holdings Corp |
Pinnacle Sherman and LiCycle Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Sherman and LiCycle Holdings
The main advantage of trading using opposite Pinnacle Sherman and LiCycle Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Sherman position performs unexpectedly, LiCycle Holdings 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 LiCycle Holdings will offset losses from the drop in LiCycle Holdings' long position.| Pinnacle Sherman vs. All Asset Fund | Pinnacle Sherman vs. HUMANA INC | Pinnacle Sherman vs. Aquagold International | Pinnacle Sherman vs. Barloworld Ltd ADR |
| LiCycle Holdings vs. Casella Waste Systems | LiCycle Holdings vs. Perma Fix Environmental Svcs | LiCycle Holdings vs. Montrose Environmental Grp | LiCycle Holdings vs. LanzaTech Global |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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