Correlation Between Aerofoam Metals and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Aerofoam Metals 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 Aerofoam Metals and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerofoam Metals and Luxfer Holdings PLC, you can compare the effects of market volatilities on Aerofoam Metals 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 Aerofoam Metals with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerofoam Metals and Luxfer Holdings.
Diversification Opportunities for Aerofoam Metals and Luxfer Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aerofoam and Luxfer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aerofoam Metals 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 Aerofoam Metals 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 Aerofoam Metals 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 Aerofoam Metals i.e., Aerofoam Metals and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Aerofoam Metals and Luxfer Holdings
If you would invest 1,229 in Luxfer Holdings PLC on August 25, 2024 and sell it today you would earn a total of 193.00 from holding Luxfer Holdings PLC or generate 15.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aerofoam Metals vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Aerofoam Metals |
| Luxfer Holdings PLC |
Aerofoam Metals and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerofoam Metals and Luxfer Holdings
The main advantage of trading using opposite Aerofoam Metals and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerofoam Metals 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.| Aerofoam Metals vs. FitLife Brands, Common | Aerofoam Metals vs. HUMANA INC | Aerofoam Metals vs. SCOR PK | Aerofoam Metals vs. Aquagold International |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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