Correlation Between LiCycle Holdings and Oklahoma College

Can any of the company-specific risk be diversified away by investing in both LiCycle Holdings and Oklahoma College 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 Oklahoma College 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 Oklahoma College Savings, you can compare the effects of market volatilities on LiCycle Holdings and Oklahoma College 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 Oklahoma College. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiCycle Holdings and Oklahoma College.

Diversification Opportunities for LiCycle Holdings and Oklahoma College

0.36

Correlation Coefficient

LiCycle Holdings  Oklahoma College

Weak diversification

The 3 months correlation between LiCycle and Oklahoma is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Oklahoma College Savings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma College Savings 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 Oklahoma College. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma College Savings has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Oklahoma College go up and down completely randomly.

Pair Corralation between LiCycle Holdings and Oklahoma College

Given the investment horizon of 90 days LiCycle Holdings Corp is expected to under-perform the Oklahoma College. In addition to that, LiCycle Holdings is 8.55 times more volatile than Oklahoma College Savings. It trades about -0.05 of its total potential returns per unit of risk. Oklahoma College Savings is currently generating about 0.06 per unit of volatility. If you would invest  1,397  in Oklahoma College Savings on October 22, 2024 and sell it today you would earn a total of  348.00  from holding Oklahoma College Savings or generate 24.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

LiCycle Holdings Corp  vs.  Oklahoma College Savings

LiCycle Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LiCycle Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Oklahoma College Savings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oklahoma College Savings has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Oklahoma College is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LiCycle Holdings and Oklahoma College

The main advantage of trading using opposite LiCycle Holdings and Oklahoma College positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Oklahoma College 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 Oklahoma College will offset losses from the drop in Oklahoma College's long position.

The idea behind LiCycle Holdings Corp and Oklahoma College Savings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.