Correlation Between LyondellBasell Industries and Loop Industries

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

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

Diversification Opportunities for LyondellBasell Industries and Loop Industries

-0.33

Correlation Coefficient

LyondellBasell Industries  Loop Industries

Very good diversification

The 3 months correlation between LyondellBasell and Loop is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding LyondellBasell Industries NV and Loop Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Industries and LyondellBasell 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 LyondellBasell Industries NV are associated (or correlated) with Loop Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Industries has no effect on the direction of LyondellBasell Industries i.e., LyondellBasell Industries and Loop Industries go up and down completely randomly.

Pair Corralation between LyondellBasell Industries and Loop Industries

Considering the 90-day investment horizon LyondellBasell Industries is expected to generate 6.41 times less return on investment than Loop Industries. But when comparing it to its historical volatility, LyondellBasell Industries NV is 2.42 times less risky than Loop Industries. It trades about 0.04 of its potential returns per unit of risk. Loop Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  112.00  in Loop Industries on May 27, 2025 and sell it today you would earn a total of  35.00  from holding Loop Industries or generate 31.25% return on investment over 90 days.

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

LyondellBasell Industries NV  vs.  Loop Industries

LyondellBasell Industries

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LyondellBasell Industries NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, LyondellBasell Industries may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Loop Industries

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Loop Industries are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Loop Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LyondellBasell Industries and Loop Industries

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

The idea behind LyondellBasell Industries NV and Loop Industries 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 Commodity Directory module to find actively traded commodities issued by global exchanges.