Correlation Between CGG and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both CGG 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 CGG and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGG and Luxfer Holdings PLC, you can compare the effects of market volatilities on CGG 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 CGG with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGG and Luxfer Holdings.
Diversification Opportunities for CGG and Luxfer Holdings
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CGG and Luxfer is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CGG 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 CGG 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 CGG 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 CGG i.e., CGG and Luxfer Holdings go up and down completely randomly.
Pair Corralation between CGG and Luxfer Holdings
Assuming the 90 days horizon CGG is expected to generate 1.04 times less return on investment than Luxfer Holdings. In addition to that, CGG is 1.34 times more volatile than Luxfer Holdings PLC. It trades about 0.0 of its total potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.01 per unit of volatility. If you would invest 1,427 in Luxfer Holdings PLC on October 9, 2024 and sell it today you would lose (109.00) from holding Luxfer Holdings PLC or give up 7.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.78% |
| Values | Daily Returns |
CGG vs. Luxfer Holdings PLC
Performance |
| Timeline |
| CGG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Luxfer Holdings PLC |
CGG and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CGG and Luxfer Holdings
The main advantage of trading using opposite CGG and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGG 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.| CGG vs. Universal Stainless Alloy | CGG vs. Tianjin Capital Environmental | CGG vs. United States Steel | CGG vs. CECO Environmental Corp |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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