Correlation Between Luxfer Holdings and Sezzle Common

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

Diversification Opportunities for Luxfer Holdings and Sezzle Common

0.79

Correlation Coefficient

Luxfer Holdings  Sezzle Common

Poor diversification

The 3 months correlation between Luxfer and Sezzle is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Sezzle Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sezzle Common Stock 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 Sezzle Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sezzle Common Stock has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Sezzle Common go up and down completely randomly.

Pair Corralation between Luxfer Holdings and Sezzle Common

Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 0.36 times more return on investment than Sezzle Common. However, Luxfer Holdings PLC is 2.78 times less risky than Sezzle Common. It trades about -0.09 of its potential returns per unit of risk. Sezzle Common Stock is currently generating about -0.15 per unit of risk. If you would invest  1,432  in Luxfer Holdings PLC on September 18, 2024 and sell it today you would lose (60.00) from holding Luxfer Holdings PLC or give up 4.19% of portfolio value over 90 days.

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

Luxfer Holdings PLC  vs.  Sezzle Common Stock

Luxfer Holdings PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Luxfer Holdings PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Luxfer Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Sezzle Common Stock

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sezzle Common Stock are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Sezzle Common disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Luxfer Holdings and Sezzle Common

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

The idea behind Luxfer Holdings PLC and Sezzle Common Stock 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.