Correlation Between Loop Industries and H B
Can any of the company-specific risk be diversified away by investing in both Loop Industries and H B 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 Loop Industries and H B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loop Industries and H B Fuller, you can compare the effects of market volatilities on Loop Industries and H B 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 Loop Industries with a short position of H B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Industries and H B.
Diversification Opportunities for Loop Industries and H B
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Loop and FUL is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Loop Industries and H B Fuller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H B Fuller and Loop Industries 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 Loop Industries are associated (or correlated) with H B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H B Fuller has no effect on the direction of Loop Industries i.e., Loop Industries and H B go up and down completely randomly.
Pair Corralation between Loop Industries and H B
Given the investment horizon of 90 days Loop Industries is expected to under-perform the H B. In addition to that, Loop Industries is 1.88 times more volatile than H B Fuller. It trades about -0.05 of its total potential returns per unit of risk. H B Fuller is currently generating about 0.04 per unit of volatility. If you would invest 7,534 in H B Fuller on August 27, 2024 and sell it today you would earn a total of 82.00 from holding H B Fuller or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loop Industries vs. H B Fuller
Performance |
| Timeline |
| Loop Industries |
| H B Fuller |
Loop Industries and H B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Industries and H B
The main advantage of trading using opposite Loop Industries and H B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Industries position performs unexpectedly, H B 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 H B will offset losses from the drop in H B's long position.| Loop Industries vs. H B Fuller | Loop Industries vs. Element Solutions | Loop Industries vs. Innospec | Loop Industries vs. Cabot |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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