Correlation Between Awilco Drilling and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Awilco Drilling 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 Awilco Drilling and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Awilco Drilling PLC and Luxfer Holdings PLC, you can compare the effects of market volatilities on Awilco Drilling 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 Awilco Drilling with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Awilco Drilling and Luxfer Holdings.
Diversification Opportunities for Awilco Drilling and Luxfer Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Awilco and Luxfer is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Awilco Drilling PLC 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 Awilco Drilling 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 Awilco Drilling PLC 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 Awilco Drilling i.e., Awilco Drilling and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Awilco Drilling and Luxfer Holdings
Assuming the 90 days horizon Awilco Drilling PLC is expected to under-perform the Luxfer Holdings. But the otc stock apears to be less risky and, when comparing its historical volatility, Awilco Drilling PLC is 3.61 times less risky than Luxfer Holdings. The otc stock trades about -0.21 of its potential returns per unit of risk. The Luxfer Holdings PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,436 in Luxfer Holdings PLC on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Luxfer Holdings PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Awilco Drilling PLC vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Awilco Drilling PLC |
| Luxfer Holdings PLC |
Awilco Drilling and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Awilco Drilling and Luxfer Holdings
The main advantage of trading using opposite Awilco Drilling and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Awilco Drilling 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.| Awilco Drilling vs. Seadrill Limited | Awilco Drilling vs. Nabors Industries | Awilco Drilling vs. Borr Drilling | Awilco Drilling vs. Patterson UTI Energy |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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