Correlation Between Luxfer Holdings and Genfit

Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Genfit 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 Genfit 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 Genfit, you can compare the effects of market volatilities on Luxfer Holdings and Genfit 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 Genfit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Genfit.

Diversification Opportunities for Luxfer Holdings and Genfit

-0.24

Correlation Coefficient

Luxfer Holdings  Genfit

Very good diversification

The 3 months correlation between Luxfer and Genfit is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Genfit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genfit 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 Genfit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genfit has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Genfit go up and down completely randomly.

Pair Corralation between Luxfer Holdings and Genfit

Given the investment horizon of 90 days Luxfer Holdings is expected to generate 3.07 times less return on investment than Genfit. But when comparing it to its historical volatility, Luxfer Holdings PLC is 1.43 times less risky than Genfit. It trades about 0.01 of its potential returns per unit of risk. Genfit is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  411.00  in Genfit on October 8, 2024 and sell it today you would lose (37.00) from holding Genfit or give up 9.0% of portfolio value over 90 days.

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

Luxfer Holdings PLC  vs.  Genfit

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.

Genfit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genfit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Luxfer Holdings and Genfit

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

The idea behind Luxfer Holdings PLC and Genfit 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..