Correlation Between Loop Industries and H B

Can any of the company-specific risk be diversified away by investing in both Loop Industries and H B 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 Loop Industries and H B into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Loop Industries and H B Fuller, you can compare the effects of market volatilities on Loop Industries and H B 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 Loop Industries with a short position of H B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Industries and H B.

Diversification Opportunities for Loop Industries and H B

0.45

Correlation Coefficient

Loop Industries  H B

Very weak diversification

The 3 months correlation between Loop and FUL is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Loop Industries and H B Fuller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H B Fuller and Loop Industries 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 Loop Industries are associated (or correlated) with H B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H B Fuller has no effect on the direction of Loop Industries i.e., Loop Industries and H B go up and down completely randomly.

Pair Corralation between Loop Industries and H B

Given the investment horizon of 90 days Loop Industries is expected to generate 3.72 times more return on investment than H B. However, Loop Industries is 3.72 times more volatile than H B Fuller. It trades about 0.01 of its potential returns per unit of risk. H B Fuller is currently generating about -0.07 per unit of risk. If you would invest  157.00  in Loop Industries on September 1, 2024 and sell it today you would lose (9.00) from holding Loop Industries or give up 5.73% of portfolio value over 90 days.

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

Loop Industries  vs.  H B Fuller

Loop Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loop Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Loop Industries is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

H B Fuller

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days H B Fuller has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Loop Industries and H B

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

The idea behind Loop Industries and H B Fuller 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.