Correlation Between Hillenbrand and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Hillenbrand 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 Hillenbrand and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillenbrand and Luxfer Holdings PLC, you can compare the effects of market volatilities on Hillenbrand 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 Hillenbrand with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and Luxfer Holdings.
Diversification Opportunities for Hillenbrand and Luxfer Holdings
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hillenbrand and Luxfer is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand 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 Hillenbrand 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 Hillenbrand 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 Hillenbrand i.e., Hillenbrand and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Hillenbrand and Luxfer Holdings
Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 0.65 times more return on investment than Luxfer Holdings. However, Hillenbrand is 1.55 times less risky than Luxfer Holdings. It trades about 0.56 of its potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.12 per unit of risk. If you would invest 2,982 in Hillenbrand on October 21, 2024 and sell it today you would earn a total of 413.00 from holding Hillenbrand or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hillenbrand vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Hillenbrand |
| Luxfer Holdings PLC |
Hillenbrand and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hillenbrand and Luxfer Holdings
The main advantage of trading using opposite Hillenbrand and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillenbrand 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.| Hillenbrand vs. IDEX Corporation | Hillenbrand vs. Watts Water Technologies | Hillenbrand vs. Donaldson | Hillenbrand vs. Gorman Rupp |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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