Correlation Between LiCycle Holdings and Fluence Energy
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Fluence Energy 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 Fluence Energy 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 Fluence Energy, you can compare the effects of market volatilities on LiCycle Holdings and Fluence Energy 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 Fluence Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Fluence Energy.
Diversification Opportunities for LiCycle Holdings and Fluence Energy
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LiCycle and Fluence is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy 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 Fluence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluence Energy has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Fluence Energy go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Fluence Energy
Given the investment horizon of 90 days LiCycle Holdings is expected to generate 2.88 times less return on investment than Fluence Energy. In addition to that, LiCycle Holdings is 2.03 times more volatile than Fluence Energy. It trades about 0.0 of its total potential returns per unit of risk. Fluence Energy is currently generating about 0.03 per unit of volatility. If you would invest 2,027 in Fluence Energy on August 24, 2024 and sell it today you would earn a total of 91.00 from holding Fluence Energy or generate 4.49% 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. Fluence Energy
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Fluence Energy |
LiCycle Holdings and Fluence Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Fluence Energy
The main advantage of trading using opposite LiCycle Holdings and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Fluence Energy 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 Fluence Energy will offset losses from the drop in Fluence Energy'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 |
| Fluence Energy vs. Altus Power | Fluence Energy vs. Ormat Technologies | Fluence Energy vs. Enlight Renewable Energy | Fluence Energy vs. Advent Technologies 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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