Correlation Between LiCycle Holdings and Greenwave Technology
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Greenwave Technology 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 Greenwave Technology 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 Greenwave Technology Solutions, you can compare the effects of market volatilities on LiCycle Holdings and Greenwave Technology 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 Greenwave Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Greenwave Technology.
Diversification Opportunities for LiCycle Holdings and Greenwave Technology
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between LiCycle and Greenwave is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Greenwave Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenwave Technology 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 Greenwave Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenwave Technology has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Greenwave Technology go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Greenwave Technology
Given the investment horizon of 90 days LiCycle Holdings Corp is expected to generate 2.15 times more return on investment than Greenwave Technology. However, LiCycle Holdings is 2.15 times more volatile than Greenwave Technology Solutions. It trades about -0.02 of its potential returns per unit of risk. Greenwave Technology Solutions is currently generating about -0.11 per unit of risk. If you would invest 256.00 in LiCycle Holdings Corp on September 2, 2024 and sell it today you would lose (45.00) from holding LiCycle Holdings Corp or give up 17.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LiCycle Holdings Corp vs. Greenwave Technology Solutions
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Greenwave Technology |
LiCycle Holdings and Greenwave Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Greenwave Technology
The main advantage of trading using opposite LiCycle Holdings and Greenwave Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Greenwave Technology 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 Greenwave Technology will offset losses from the drop in Greenwave Technology'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 |
| Greenwave Technology vs. BluMetric Environmental | Greenwave Technology vs. BQE Water | Greenwave Technology vs. Avalon Holdings | Greenwave Technology vs. Quest Resource Holding |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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