Correlation Between Ivanhoe Electric and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Electric 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 Ivanhoe Electric and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Electric and Luxfer Holdings PLC, you can compare the effects of market volatilities on Ivanhoe Electric 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 Ivanhoe Electric with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and Luxfer Holdings.
Diversification Opportunities for Ivanhoe Electric and Luxfer Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ivanhoe and Luxfer is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric 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 Ivanhoe Electric 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 Ivanhoe Electric 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 Ivanhoe Electric i.e., Ivanhoe Electric and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Ivanhoe Electric and Luxfer Holdings
Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the Luxfer Holdings. In addition to that, Ivanhoe Electric is 1.66 times more volatile than Luxfer Holdings PLC. It trades about -0.07 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 1,202 in Luxfer Holdings PLC on January 11, 2025 and sell it today you would lose (189.00) from holding Luxfer Holdings PLC or give up 15.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Electric vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Ivanhoe Electric |
| Luxfer Holdings PLC |
Ivanhoe Electric and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Electric and Luxfer Holdings
The main advantage of trading using opposite Ivanhoe Electric and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric 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.| Ivanhoe Electric vs. Valens | Ivanhoe Electric vs. Keurig Dr Pepper | Ivanhoe Electric vs. NETGEAR | Ivanhoe Electric vs. Boston Beer |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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