Correlation Between LiCycle Holdings and Loews Corp
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Loews Corp 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 Loews Corp 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 Loews Corp, you can compare the effects of market volatilities on LiCycle Holdings and Loews Corp 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 Loews Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Loews Corp.
Diversification Opportunities for LiCycle Holdings and Loews Corp
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between LiCycle and Loews is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Loews Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loews Corp 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 Loews Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loews Corp has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Loews Corp go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Loews Corp
Given the investment horizon of 90 days LiCycle Holdings Corp is expected to under-perform the Loews Corp. In addition to that, LiCycle Holdings is 9.09 times more volatile than Loews Corp. It trades about -0.26 of its total potential returns per unit of risk. Loews Corp is currently generating about 0.15 per unit of volatility. If you would invest 8,291 in Loews Corp on September 13, 2024 and sell it today you would earn a total of 182.00 from holding Loews Corp or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LiCycle Holdings Corp vs. Loews Corp
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Loews Corp |
LiCycle Holdings and Loews Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Loews Corp
The main advantage of trading using opposite LiCycle Holdings and Loews Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Loews Corp 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 Loews Corp will offset losses from the drop in Loews Corp's long position.| LiCycle Holdings vs. Casella Waste Systems | LiCycle Holdings vs. Montrose Environmental Grp | LiCycle Holdings vs. LanzaTech Global | LiCycle Holdings vs. Republic Services |
| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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