Correlation Between 26442CBJ2 and Luxfer Holdings

Can any of the company-specific risk be diversified away by investing in both 26442CBJ2 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 26442CBJ2 and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUK 495 15 JAN 33 and Luxfer Holdings PLC, you can compare the effects of market volatilities on 26442CBJ2 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 26442CBJ2 with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442CBJ2 and Luxfer Holdings.

Diversification Opportunities for 26442CBJ2 and Luxfer Holdings

-0.3

Correlation Coefficient

26442CBJ2  Luxfer Holdings

Very good diversification

The 3 months correlation between 26442CBJ2 and Luxfer is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding DUK 495 15 JAN 33 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 26442CBJ2 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 DUK 495 15 JAN 33 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 26442CBJ2 i.e., 26442CBJ2 and Luxfer Holdings go up and down completely randomly.

Pair Corralation between 26442CBJ2 and Luxfer Holdings

Assuming the 90 days trading horizon DUK 495 15 JAN 33 is expected to under-perform the Luxfer Holdings. But the bond apears to be less risky and, when comparing its historical volatility, DUK 495 15 JAN 33 is 3.88 times less risky than Luxfer Holdings. The bond trades about -0.1 of its potential returns per unit of risk. The Luxfer Holdings PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,261  in Luxfer Holdings PLC on October 10, 2024 and sell it today you would earn a total of  7.00  from holding Luxfer Holdings PLC or generate 0.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

DUK 495 15 JAN 33  vs.  Luxfer Holdings PLC

DUK 495 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUK 495 15 JAN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442CBJ2 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Luxfer Holdings PLC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Luxfer Holdings PLC are ranked lower than 1 (%) 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.

Pair Trading with 26442CBJ2 and Luxfer Holdings

The main advantage of trading using opposite 26442CBJ2 and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442CBJ2 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 DUK 495 15 JAN 33 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.