Correlation Between LiCycle Holdings and Thrivent Natural

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

Diversification Opportunities for LiCycle Holdings and Thrivent Natural

-0.53

Correlation Coefficient

LiCycle Holdings  Thrivent Natural

Excellent diversification

The 3 months correlation between LiCycle and Thrivent is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Thrivent Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Natural Res 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 Thrivent Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Natural Res has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Thrivent Natural go up and down completely randomly.

Pair Corralation between LiCycle Holdings and Thrivent Natural

Given the investment horizon of 90 days LiCycle Holdings Corp is expected to under-perform the Thrivent Natural. In addition to that, LiCycle Holdings is 33.52 times more volatile than Thrivent Natural Resources. It trades about -0.04 of its total potential returns per unit of risk. Thrivent Natural Resources is currently generating about 0.1 per unit of volatility. If you would invest  879.00  in Thrivent Natural Resources on October 20, 2024 and sell it today you would earn a total of  117.00  from holding Thrivent Natural Resources or generate 13.31% return on investment over 90 days.

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

LiCycle Holdings Corp  vs.  Thrivent Natural Resources

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.

Thrivent Natural Res

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Natural Resources are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thrivent Natural 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 Thrivent Natural

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

The idea behind LiCycle Holdings Corp and Thrivent Natural Resources 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.