Correlation Between Loop Industries and Westwater Resources

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

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

Diversification Opportunities for Loop Industries and Westwater Resources

0.2

Correlation Coefficient

Loop Industries  Westwater Resources

Modest diversification

The 3 months correlation between Loop and Westwater is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Loop Industries and Westwater Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwater Resources 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 Westwater Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwater Resources has no effect on the direction of Loop Industries i.e., Loop Industries and Westwater Resources go up and down completely randomly.

Pair Corralation between Loop Industries and Westwater Resources

Given the investment horizon of 90 days Loop Industries is expected to under-perform the Westwater Resources. But the stock apears to be less risky and, when comparing its historical volatility, Loop Industries is 2.17 times less risky than Westwater Resources. The stock trades about -0.13 of its potential returns per unit of risk. The Westwater Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  69.00  in Westwater Resources on September 10, 2025 and sell it today you would earn a total of  31.00  from holding Westwater Resources or generate 44.93% return on investment over 90 days.

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

Loop Industries  vs.  Westwater Resources

Loop Industries

Risk-Adjusted Performance

Weakest

Over the last 90 days Loop Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2026. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Westwater Resources

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Westwater Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Westwater Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Loop Industries and Westwater Resources

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

The idea behind Loop Industries and Westwater Resources 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.