Correlation Between LiCycle Holdings and Oaktree Diversifiedome

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

Diversification Opportunities for LiCycle Holdings and Oaktree Diversifiedome

-0.43

Correlation Coefficient

LiCycle Holdings  Oaktree Diversifiedome

Very good diversification

The 3 months correlation between LiCycle and Oaktree is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Oaktree Diversifiedome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Diversifiedome 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 Oaktree Diversifiedome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Diversifiedome has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Oaktree Diversifiedome go up and down completely randomly.

Pair Corralation between LiCycle Holdings and Oaktree Diversifiedome

Given the investment horizon of 90 days LiCycle Holdings Corp is expected to generate 17.13 times more return on investment than Oaktree Diversifiedome. However, LiCycle Holdings is 17.13 times more volatile than Oaktree Diversifiedome. It trades about 0.17 of its potential returns per unit of risk. Oaktree Diversifiedome is currently generating about -0.13 per unit of risk. If you would invest  181.00  in LiCycle Holdings Corp on October 4, 2024 and sell it today you would earn a total of  56.00  from holding LiCycle Holdings Corp or generate 30.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

LiCycle Holdings Corp  vs.  Oaktree Diversifiedome

LiCycle Holdings Corp

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LiCycle Holdings Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, LiCycle Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Oaktree Diversifiedome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oaktree Diversifiedome has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Oaktree Diversifiedome 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 Oaktree Diversifiedome

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

The idea behind LiCycle Holdings Corp and Oaktree Diversifiedome 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .