Correlation Between Luxfer Holdings and EPR Properties

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

By analyzing existing cross correlation between Luxfer Holdings PLC and EPR Properties 5750, you can compare the effects of market volatilities on Luxfer Holdings and EPR Properties 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 Luxfer Holdings with a short position of EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and EPR Properties.

Diversification Opportunities for Luxfer Holdings and EPR Properties

0.04

Correlation Coefficient

Luxfer Holdings  EPR Properties

Significant diversification

The 3 months correlation between Luxfer and EPR is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and EPR Properties 5750 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties 5750 and Luxfer Holdings 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 Luxfer Holdings PLC are associated (or correlated) with EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties 5750 has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and EPR Properties go up and down completely randomly.

Pair Corralation between Luxfer Holdings and EPR Properties

Given the investment horizon of 90 days Luxfer Holdings PLC is expected to under-perform the EPR Properties. In addition to that, Luxfer Holdings is 2.07 times more volatile than EPR Properties 5750. It trades about -0.16 of its total potential returns per unit of risk. EPR Properties 5750 is currently generating about -0.24 per unit of volatility. If you would invest  2,160  in EPR Properties 5750 on October 7, 2024 and sell it today you would lose (185.00) from holding EPR Properties 5750 or give up 8.56% of portfolio value over 90 days.

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

Luxfer Holdings PLC  vs.  EPR Properties 5750

Luxfer Holdings PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Luxfer Holdings PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Luxfer Holdings is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

EPR Properties 5750

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EPR Properties 5750 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Preferred Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Luxfer Holdings and EPR Properties

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

The idea behind Luxfer Holdings PLC and EPR Properties 5750 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.