Correlation Between Cumulus Media and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Cumulus Media 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 Cumulus Media and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumulus Media Class and Luxfer Holdings PLC, you can compare the effects of market volatilities on Cumulus Media 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 Cumulus Media with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Luxfer Holdings.
Diversification Opportunities for Cumulus Media and Luxfer Holdings
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cumulus and Luxfer is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class 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 Cumulus Media 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 Cumulus Media Class 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 Cumulus Media i.e., Cumulus Media and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Cumulus Media and Luxfer Holdings
Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the Luxfer Holdings. In addition to that, Cumulus Media is 1.64 times more volatile than Luxfer Holdings PLC. It trades about -0.08 of its total potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.02 per unit of volatility. If you would invest 1,235 in Luxfer Holdings PLC on September 19, 2024 and sell it today you would earn a total of 149.00 from holding Luxfer Holdings PLC or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Cumulus Media Class |
| Luxfer Holdings PLC |
Cumulus Media and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and Luxfer Holdings
The main advantage of trading using opposite Cumulus Media and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media 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.| Cumulus Media vs. Marchex | Cumulus Media vs. Direct Digital Holdings | Cumulus Media vs. Cimpress NV | Cumulus Media vs. Emerald Expositions Events |
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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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