Correlation Between LiCycle Holdings and Perma Fix
Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Perma Fix 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 Perma Fix 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 Perma Fix Environmental Svcs, you can compare the effects of market volatilities on LiCycle Holdings and Perma Fix 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 Perma Fix. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Perma Fix.
Diversification Opportunities for LiCycle Holdings and Perma Fix
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LiCycle and Perma is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Perma Fix Environmental Svcs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental 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 Perma Fix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Perma Fix go up and down completely randomly.
Pair Corralation between LiCycle Holdings and Perma Fix
Given the investment horizon of 90 days LiCycle Holdings Corp is expected to under-perform the Perma Fix. In addition to that, LiCycle Holdings is 2.32 times more volatile than Perma Fix Environmental Svcs. It trades about -0.01 of its total potential returns per unit of risk. Perma Fix Environmental Svcs is currently generating about 0.09 per unit of volatility. If you would invest 995.00 in Perma Fix Environmental Svcs on September 1, 2024 and sell it today you would earn a total of 433.00 from holding Perma Fix Environmental Svcs or generate 43.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LiCycle Holdings Corp vs. Perma Fix Environmental Svcs
Performance |
| Timeline |
| LiCycle Holdings Corp |
| Perma Fix Environmental |
LiCycle Holdings and Perma Fix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LiCycle Holdings and Perma Fix
The main advantage of trading using opposite LiCycle Holdings and Perma Fix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Perma Fix 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 Perma Fix will offset losses from the drop in Perma Fix'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 |
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..
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |