Correlation Between LiCycle Holdings and Knife River
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Knife River 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 Knife River 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 Knife River, you can compare the effects of market volatilities on LiCycle Holdings and Knife River 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 Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Knife River.
Diversification Opportunities for LiCycle Holdings and Knife River
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between LiCycle and Knife is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River 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 Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Knife River go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Knife River
Given the investment horizon of 90 days LiCycle Holdings Corp is expected to under-perform the Knife River. In addition to that, LiCycle Holdings is 1.67 times more volatile than Knife River. It trades about -0.13 of its total potential returns per unit of risk. Knife River is currently generating about -0.13 per unit of volatility. If you would invest 9,997 in Knife River on November 27, 2024 and sell it today you would lose (724.00) from holding Knife River or give up 7.24% 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. Knife River
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Knife River |
LiCycle Holdings and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Knife River
The main advantage of trading using opposite LiCycle Holdings and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River'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 |
| Knife River vs. Franklin Street Properties | Knife River vs. NL Industries | Knife River vs. Eddy Smart Home | Knife River vs. Alto Ingredients |
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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