Correlation Between Loop Industries and Alto Ingredients
Can any of the company-specific risk be diversified away by investing in both Loop Industries and Alto Ingredients 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 Alto Ingredients into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loop Industries and Alto Ingredients, you can compare the effects of market volatilities on Loop Industries and Alto Ingredients 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 Alto Ingredients. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Industries and Alto Ingredients.
Diversification Opportunities for Loop Industries and Alto Ingredients
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Loop and Alto is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Loop Industries and Alto Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alto Ingredients 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 Alto Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alto Ingredients has no effect on the direction of Loop Industries i.e., Loop Industries and Alto Ingredients go up and down completely randomly.
Pair Corralation between Loop Industries and Alto Ingredients
Given the investment horizon of 90 days Loop Industries is expected to under-perform the Alto Ingredients. But the stock apears to be less risky and, when comparing its historical volatility, Loop Industries is 1.17 times less risky than Alto Ingredients. The stock trades about -0.07 of its potential returns per unit of risk. The Alto Ingredients is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 113.00 in Alto Ingredients on August 31, 2025 and sell it today you would earn a total of 132.00 from holding Alto Ingredients or generate 116.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loop Industries vs. Alto Ingredients
Performance |
| Timeline |
| Loop Industries |
| Alto Ingredients |
Loop Industries and Alto Ingredients Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Industries and Alto Ingredients
The main advantage of trading using opposite Loop Industries and Alto Ingredients positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Industries position performs unexpectedly, Alto Ingredients 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 Alto Ingredients will offset losses from the drop in Alto Ingredients' long position.| Loop Industries vs. Northstar Clean Technologies | Loop Industries vs. Capital Clean Energy | Loop Industries vs. CVW CleanTech | Loop Industries vs. Cleantech Power Corp |
| Alto Ingredients vs. Xtreme Motorsports International | Alto Ingredients vs. Video Display | Alto Ingredients vs. Ultra Clean Holdings | Alto Ingredients vs. Academy Sports Outdoors |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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