Correlation Between Luxfer Holdings and Renault SA

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

Diversification Opportunities for Luxfer Holdings and Renault SA

0.0

Correlation Coefficient

Luxfer Holdings  Renault SA

Pay attention - limited upside

The 3 months correlation between Luxfer and Renault is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Renault SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renault SA 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 Renault SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renault SA has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Renault SA go up and down completely randomly.

Pair Corralation between Luxfer Holdings and Renault SA

If you would invest  0.00  in Renault SA on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Renault SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

Luxfer Holdings PLC  vs.  Renault SA

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.

Renault SA

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Renault SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Renault SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Luxfer Holdings and Renault SA

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

The idea behind Luxfer Holdings PLC and Renault SA 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.