Correlation Between LiCycle Holdings and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Dodge Cox 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 Dodge Cox 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 Dodge Global Stock, you can compare the effects of market volatilities on LiCycle Holdings and Dodge Cox 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 Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Dodge Cox.
Diversification Opportunities for LiCycle Holdings and Dodge Cox
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LiCycle and Dodge is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Dodge Global Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Global Stock 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 Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Global Stock has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Dodge Cox go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Dodge Cox
Given the investment horizon of 90 days LiCycle Holdings Corp is expected to under-perform the Dodge Cox. In addition to that, LiCycle Holdings is 6.92 times more volatile than Dodge Global Stock. It trades about -0.13 of its total potential returns per unit of risk. Dodge Global Stock is currently generating about 0.08 per unit of volatility. If you would invest 1,448 in Dodge Global Stock on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Dodge Global Stock or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LiCycle Holdings Corp vs. Dodge Global Stock
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Dodge Global Stock |
LiCycle Holdings and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Dodge Cox
The main advantage of trading using opposite LiCycle Holdings and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox'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 |
| Dodge Cox vs. Vanguard Financials Index | Dodge Cox vs. John Hancock Financial | Dodge Cox vs. Davis Financial Fund | Dodge Cox vs. Putnam Global Financials |
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 CEOs Directory module to screen CEOs from public companies around the world.
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