Correlation Between LiCycle Holdings and Clean Harbors
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Clean Harbors 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 Clean Harbors 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 Clean Harbors, you can compare the effects of market volatilities on LiCycle Holdings and Clean Harbors 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 Clean Harbors. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Clean Harbors.
Diversification Opportunities for LiCycle Holdings and Clean Harbors
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LiCycle and Clean is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Clean Harbors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Harbors 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 Clean Harbors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Harbors has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Clean Harbors go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Clean Harbors
Given the investment horizon of 90 days LiCycle Holdings is expected to generate 8.9 times less return on investment than Clean Harbors. In addition to that, LiCycle Holdings is 5.76 times more volatile than Clean Harbors. It trades about 0.0 of its total potential returns per unit of risk. Clean Harbors is currently generating about 0.11 per unit of volatility. If you would invest 16,957 in Clean Harbors on September 2, 2024 and sell it today you would earn a total of 9,052 from holding Clean Harbors or generate 53.38% 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. Clean Harbors
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Clean Harbors |
LiCycle Holdings and Clean Harbors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Clean Harbors
The main advantage of trading using opposite LiCycle Holdings and Clean Harbors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Clean Harbors 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 Clean Harbors will offset losses from the drop in Clean Harbors' 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 |
| Clean Harbors vs. Waste Connections | Clean Harbors vs. Casella Waste Systems | Clean Harbors vs. Waste Management | Clean Harbors vs. Gfl Environmental Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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