Correlation Between 00108WAH3 and Luxfer Holdings

Can any of the company-specific risk be diversified away by investing in both 00108WAH3 and Luxfer Holdings 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 00108WAH3 and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AEP TEX INC and Luxfer Holdings PLC, you can compare the effects of market volatilities on 00108WAH3 and Luxfer Holdings 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 00108WAH3 with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAH3 and Luxfer Holdings.

Diversification Opportunities for 00108WAH3 and Luxfer Holdings

-0.06

Correlation Coefficient

00108WAH3  Luxfer Holdings

Good diversification

The 3 months correlation between 00108WAH3 and Luxfer is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and Luxfer Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luxfer Holdings PLC and 00108WAH3 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 AEP TEX INC are associated (or correlated) with Luxfer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luxfer Holdings PLC has no effect on the direction of 00108WAH3 i.e., 00108WAH3 and Luxfer Holdings go up and down completely randomly.

Pair Corralation between 00108WAH3 and Luxfer Holdings

Assuming the 90 days trading horizon AEP TEX INC is expected to generate 0.91 times more return on investment than Luxfer Holdings. However, AEP TEX INC is 1.1 times less risky than Luxfer Holdings. It trades about -0.28 of its potential returns per unit of risk. Luxfer Holdings PLC is currently generating about -0.34 per unit of risk. If you would invest  9,740  in AEP TEX INC on October 11, 2024 and sell it today you would lose (681.00) from holding AEP TEX INC or give up 6.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

AEP TEX INC  vs.  Luxfer Holdings PLC

AEP TEX INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AEP TEX INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for AEP TEX INC investors.

Luxfer Holdings PLC

Risk-Adjusted Performance

0 of 100

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 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.

Pair Trading with 00108WAH3 and Luxfer Holdings

The main advantage of trading using opposite 00108WAH3 and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAH3 position performs unexpectedly, Luxfer Holdings 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 Luxfer Holdings will offset losses from the drop in Luxfer Holdings' long position.

The idea behind AEP TEX INC and Luxfer Holdings PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.