Correlation Between Luxfer Holdings and Intevac

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

Diversification Opportunities for Luxfer Holdings and Intevac

-0.46

Correlation Coefficient

Luxfer Holdings  Intevac

Very good diversification

The 3 months correlation between Luxfer and Intevac is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Intevac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intevac 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 Intevac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intevac has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Intevac go up and down completely randomly.

Pair Corralation between Luxfer Holdings and Intevac

Given the investment horizon of 90 days Luxfer Holdings PLC is expected to under-perform the Intevac. But the stock apears to be less risky and, when comparing its historical volatility, Luxfer Holdings PLC is 1.27 times less risky than Intevac. The stock trades about -0.07 of its potential returns per unit of risk. The Intevac is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  335.00  in Intevac on December 29, 2024 and sell it today you would earn a total of  65.00  from holding Intevac or generate 19.4% return on investment over 90 days.

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

Luxfer Holdings PLC  vs.  Intevac

Luxfer Holdings PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Luxfer Holdings PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Intevac

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intevac are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Intevac exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Luxfer Holdings and Intevac

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

The idea behind Luxfer Holdings PLC and Intevac 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 Global Correlations module to find global opportunities by holding instruments from different markets.