Correlation Between LiCycle Holdings and Cimpress
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Cimpress 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 Cimpress 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 Cimpress NV, you can compare the effects of market volatilities on LiCycle Holdings and Cimpress 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 Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Cimpress.
Diversification Opportunities for LiCycle Holdings and Cimpress
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LiCycle and Cimpress is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV 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 Cimpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimpress NV has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Cimpress go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Cimpress
Given the investment horizon of 90 days LiCycle Holdings is expected to generate 1.08 times less return on investment than Cimpress. In addition to that, LiCycle Holdings is 3.81 times more volatile than Cimpress NV. It trades about 0.02 of its total potential returns per unit of risk. Cimpress NV is currently generating about 0.09 per unit of volatility. If you would invest 7,716 in Cimpress NV on August 24, 2024 and sell it today you would earn a total of 409.00 from holding Cimpress NV or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LiCycle Holdings Corp vs. Cimpress NV
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Cimpress NV |
LiCycle Holdings and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Cimpress
The main advantage of trading using opposite LiCycle Holdings and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Cimpress 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 Cimpress will offset losses from the drop in Cimpress' 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 |
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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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