Correlation Between LiCycle Holdings and Anaergia
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Anaergia 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 LiCycle Holdings and Anaergia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LiCycle Holdings Corp and Anaergia, you can compare the effects of market volatilities on LiCycle Holdings and Anaergia 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 LiCycle Holdings with a short position of Anaergia. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Anaergia.
Diversification Opportunities for LiCycle Holdings and Anaergia
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LiCycle and Anaergia is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Anaergia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anaergia and LiCycle Holdings 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 LiCycle Holdings Corp are associated (or correlated) with Anaergia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anaergia has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Anaergia go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Anaergia
Given the investment horizon of 90 days LiCycle Holdings Corp is expected to under-perform the Anaergia. But the stock apears to be less risky and, when comparing its historical volatility, LiCycle Holdings Corp is 7.92 times less risky than Anaergia. The stock trades about -0.02 of its potential returns per unit of risk. The Anaergia is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Anaergia on September 1, 2024 and sell it today you would earn a total of 46.00 from holding Anaergia or generate 209.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LiCycle Holdings Corp vs. Anaergia
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Anaergia |
LiCycle Holdings and Anaergia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Anaergia
The main advantage of trading using opposite LiCycle Holdings and Anaergia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Anaergia 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 Anaergia will offset losses from the drop in Anaergia's long position.| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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