Correlation Between JE Cleantech and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both JE Cleantech 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 JE Cleantech and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JE Cleantech Holdings and Luxfer Holdings PLC, you can compare the effects of market volatilities on JE Cleantech 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 JE Cleantech with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of JE Cleantech and Luxfer Holdings.
Diversification Opportunities for JE Cleantech and Luxfer Holdings
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between JCSE and Luxfer is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding JE Cleantech Holdings 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 JE Cleantech 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 JE Cleantech Holdings 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 JE Cleantech i.e., JE Cleantech and Luxfer Holdings go up and down completely randomly.
Pair Corralation between JE Cleantech and Luxfer Holdings
Given the investment horizon of 90 days JE Cleantech Holdings is expected to generate 4.39 times more return on investment than Luxfer Holdings. However, JE Cleantech is 4.39 times more volatile than Luxfer Holdings PLC. It trades about 0.11 of its potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.19 per unit of risk. If you would invest 115.00 in JE Cleantech Holdings on September 4, 2024 and sell it today you would earn a total of 64.00 from holding JE Cleantech Holdings or generate 55.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JE Cleantech Holdings vs. Luxfer Holdings PLC
Performance |
Timeline |
JE Cleantech Holdings |
Luxfer Holdings PLC |
JE Cleantech and Luxfer Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JE Cleantech and Luxfer Holdings
The main advantage of trading using opposite JE Cleantech and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JE Cleantech 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.JE Cleantech vs. Nuburu Inc | JE Cleantech vs. Laser Photonics | JE Cleantech vs. Reelcause | JE Cleantech vs. Quality Industrial Corp |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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