Correlation Between Acm Research and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Acm Research 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 Acm Research and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acm Research and Luxfer Holdings PLC, you can compare the effects of market volatilities on Acm Research 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 Acm Research with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acm Research and Luxfer Holdings.
Diversification Opportunities for Acm Research and Luxfer Holdings
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Acm and Luxfer is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Acm Research 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 Acm Research 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 Acm Research 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 Acm Research i.e., Acm Research and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Acm Research and Luxfer Holdings
Given the investment horizon of 90 days Acm Research is expected to generate 1.81 times more return on investment than Luxfer Holdings. However, Acm Research is 1.81 times more volatile than Luxfer Holdings PLC. It trades about 0.04 of its potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.01 per unit of risk. If you would invest 1,259 in Acm Research on September 1, 2024 and sell it today you would earn a total of 460.00 from holding Acm Research or generate 36.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acm Research vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Acm Research |
| Luxfer Holdings PLC |
Acm Research and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acm Research and Luxfer Holdings
The main advantage of trading using opposite Acm Research and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acm Research 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.| Acm Research vs. Axcelis Technologies | Acm Research vs. inTest | Acm Research vs. Lam Research Corp | Acm Research vs. Photronics |
| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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