Correlation Between LiCycle Holdings and Rreef Property

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

Diversification Opportunities for LiCycle Holdings and Rreef Property

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between LiCycle and Rreef is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding LiCycle Holdings Corp and Rreef Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rreef Property Trust 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 Rreef Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rreef Property Trust has no effect on the direction of LiCycle Holdings i.e., LiCycle Holdings and Rreef Property go up and down completely randomly.

Pair Corralation between LiCycle Holdings and Rreef Property

Given the investment horizon of 90 days LiCycle Holdings Corp is expected to under-perform the Rreef Property. In addition to that, LiCycle Holdings is 46.91 times more volatile than Rreef Property Trust. It trades about -0.09 of its total potential returns per unit of risk. Rreef Property Trust is currently generating about -0.01 per unit of volatility. If you would invest  1,343  in Rreef Property Trust on October 6, 2024 and sell it today you would lose (1.00) from holding Rreef Property Trust or give up 0.07% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

LiCycle Holdings Corp  vs.  Rreef Property Trust

 Performance 
       Timeline  
LiCycle Holdings Corp 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in LiCycle Holdings Corp are ranked lower than 3 (%) 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.
Rreef Property Trust 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Rreef Property Trust are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rreef Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

LiCycle Holdings and Rreef Property Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LiCycle Holdings and Rreef Property

The main advantage of trading using opposite LiCycle Holdings and Rreef Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiCycle Holdings position performs unexpectedly, Rreef Property 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 Rreef Property will offset losses from the drop in Rreef Property's long position.
The idea behind LiCycle Holdings Corp and Rreef Property Trust 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 Stocks Directory module to find actively traded stocks across global markets.

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