Correlation Between CNA Financial and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both CNA Financial and Luxfer Holdings 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 CNA Financial and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNA Financial and Luxfer Holdings PLC, you can compare the effects of market volatilities on CNA Financial and Luxfer Holdings 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 CNA Financial with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNA Financial and Luxfer Holdings.
Diversification Opportunities for CNA Financial and Luxfer Holdings
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CNA and Luxfer is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CNA Financial and Luxfer Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luxfer Holdings PLC and CNA Financial 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 CNA Financial are associated (or correlated) with Luxfer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luxfer Holdings PLC has no effect on the direction of CNA Financial i.e., CNA Financial and Luxfer Holdings go up and down completely randomly.
Pair Corralation between CNA Financial and Luxfer Holdings
Considering the 90-day investment horizon CNA Financial is expected to generate 0.58 times more return on investment than Luxfer Holdings. However, CNA Financial is 1.74 times less risky than Luxfer Holdings. It trades about 0.08 of its potential returns per unit of risk. Luxfer Holdings PLC is currently generating about -0.04 per unit of risk. If you would invest 4,668 in CNA Financial on December 18, 2024 and sell it today you would earn a total of 266.00 from holding CNA Financial or generate 5.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CNA Financial vs. Luxfer Holdings PLC
Performance |
Timeline |
CNA Financial |
Luxfer Holdings PLC |
CNA Financial and Luxfer Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CNA Financial and Luxfer Holdings
The main advantage of trading using opposite CNA Financial and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNA Financial position performs unexpectedly, Luxfer Holdings 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 Luxfer Holdings will offset losses from the drop in Luxfer Holdings' long position.CNA Financial vs. Selective Insurance Group | CNA Financial vs. Kemper | CNA Financial vs. Donegal Group B | CNA Financial vs. Argo Group International |
Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |