Correlation Between Virtus Dfa and LiCycle Holdings

Can any of the company-specific risk be diversified away by investing in both Virtus Dfa and LiCycle Holdings 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 Virtus Dfa and LiCycle Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Virtus Dfa 2040 and LiCycle Holdings Corp, you can compare the effects of market volatilities on Virtus Dfa and LiCycle Holdings 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 Virtus Dfa with a short position of LiCycle Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Dfa and LiCycle Holdings.

Diversification Opportunities for Virtus Dfa and LiCycle Holdings

0.34

Correlation Coefficient

Virtus Dfa  LiCycle Holdings

Weak diversification

The 3 months correlation between Virtus and LiCycle is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Dfa 2040 and LiCycle Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LiCycle Holdings Corp and Virtus Dfa 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 Virtus Dfa 2040 are associated (or correlated) with LiCycle Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LiCycle Holdings Corp has no effect on the direction of Virtus Dfa i.e., Virtus Dfa and LiCycle Holdings go up and down completely randomly.

Pair Corralation between Virtus Dfa and LiCycle Holdings

Assuming the 90 days horizon Virtus Dfa 2040 is expected to generate 0.1 times more return on investment than LiCycle Holdings. However, Virtus Dfa 2040 is 10.32 times less risky than LiCycle Holdings. It trades about 0.05 of its potential returns per unit of risk. LiCycle Holdings Corp is currently generating about -0.03 per unit of risk. If you would invest  886.00  in Virtus Dfa 2040 on October 5, 2024 and sell it today you would earn a total of  166.00  from holding Virtus Dfa 2040 or generate 18.74% return on investment over 90 days.

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

Virtus Dfa 2040  vs.  LiCycle Holdings Corp

Virtus Dfa 2040

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Dfa 2040 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

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 latest unfluctuating performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Virtus Dfa and LiCycle Holdings

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

The idea behind Virtus Dfa 2040 and LiCycle Holdings Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.