Correlation Between Loop Energy and Ilika Plc

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

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

Diversification Opportunities for Loop Energy and Ilika Plc

0.0

Correlation Coefficient

Loop Energy  Ilika Plc

Pay attention - limited upside

The 3 months correlation between Loop and Ilika is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Loop Energy and Ilika plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilika plc and Loop Energy 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 Energy are associated (or correlated) with Ilika Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilika plc has no effect on the direction of Loop Energy i.e., Loop Energy and Ilika Plc go up and down completely randomly.

Pair Corralation between Loop Energy and Ilika Plc

Assuming the 90 days horizon Loop Energy is expected to generate 0.5 times more return on investment than Ilika Plc. However, Loop Energy is 2.0 times less risky than Ilika Plc. It trades about 0.01 of its potential returns per unit of risk. Ilika plc is currently generating about -0.03 per unit of risk. If you would invest  8.00  in Loop Energy on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Loop Energy or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Loop Energy  vs.  Ilika plc

Loop Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loop Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Loop Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ilika plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ilika plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Loop Energy and Ilika Plc

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

The idea behind Loop Energy and Ilika plc 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.

Check out your portfolio center.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.