Correlation Between Greenland Acquisition and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Greenland Acquisition 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 Greenland Acquisition and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenland Acquisition Corp and Luxfer Holdings PLC, you can compare the effects of market volatilities on Greenland Acquisition 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 Greenland Acquisition with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenland Acquisition and Luxfer Holdings.
Diversification Opportunities for Greenland Acquisition and Luxfer Holdings
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greenland and Luxfer is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Greenland Acquisition Corp 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 Greenland Acquisition 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 Greenland Acquisition Corp 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 Greenland Acquisition i.e., Greenland Acquisition and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Greenland Acquisition and Luxfer Holdings
Given the investment horizon of 90 days Greenland Acquisition Corp is expected to under-perform the Luxfer Holdings. In addition to that, Greenland Acquisition is 1.51 times more volatile than Luxfer Holdings PLC. It trades about -0.18 of its total potential returns per unit of risk. Luxfer Holdings PLC is currently generating about -0.22 per unit of volatility. If you would invest 1,450 in Luxfer Holdings PLC on September 24, 2024 and sell it today you would lose (132.00) from holding Luxfer Holdings PLC or give up 9.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenland Acquisition Corp vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Greenland Acquisition |
| Luxfer Holdings PLC |
Greenland Acquisition and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenland Acquisition and Luxfer Holdings
The main advantage of trading using opposite Greenland Acquisition and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenland Acquisition 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.| Greenland Acquisition vs. Shapeways Holdings, Common | Greenland Acquisition vs. JE Cleantech Holdings | Greenland Acquisition vs. Laser Photonics | Greenland Acquisition vs. Siemens AG Class |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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