Correlation Between CIRCOR International and Luxfer Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both CIRCOR International 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 CIRCOR International and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIRCOR International and Luxfer Holdings PLC, you can compare the effects of market volatilities on CIRCOR International 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 CIRCOR International with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIRCOR International and Luxfer Holdings.

Diversification Opportunities for CIRCOR International and Luxfer Holdings

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between CIRCOR and Luxfer is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding CIRCOR International 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 CIRCOR International 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 CIRCOR International 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 CIRCOR International i.e., CIRCOR International and Luxfer Holdings go up and down completely randomly.

Pair Corralation between CIRCOR International and Luxfer Holdings

If you would invest  1,286  in Luxfer Holdings PLC on August 27, 2024 and sell it today you would earn a total of  136.00  from holding Luxfer Holdings PLC or generate 10.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy4.76%
ValuesDaily Returns

CIRCOR International  vs.  Luxfer Holdings PLC

 Performance 
       Timeline  
CIRCOR International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CIRCOR International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, CIRCOR International is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
Luxfer Holdings PLC 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Luxfer Holdings PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent technical and fundamental indicators, Luxfer Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

CIRCOR International and Luxfer Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CIRCOR International and Luxfer Holdings

The main advantage of trading using opposite CIRCOR International and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIRCOR International 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 CIRCOR International 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.
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

Other Complementary Tools

Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated