Correlation Between Luxfer Holdings and Cabo Drilling
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Cabo Drilling 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 Luxfer Holdings and Cabo Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luxfer Holdings PLC and Cabo Drilling Corp, you can compare the effects of market volatilities on Luxfer Holdings and Cabo Drilling 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 Luxfer Holdings with a short position of Cabo Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Cabo Drilling.
Diversification Opportunities for Luxfer Holdings and Cabo Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Luxfer and Cabo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Cabo Drilling Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabo Drilling Corp and Luxfer Holdings 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 Luxfer Holdings PLC are associated (or correlated) with Cabo Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabo Drilling Corp has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Cabo Drilling go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Cabo Drilling
If you would invest 1,286 in Luxfer Holdings PLC on August 28, 2024 and sell it today you would earn a total of 164.00 from holding Luxfer Holdings PLC or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Cabo Drilling Corp
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Cabo Drilling Corp |
Luxfer Holdings and Cabo Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Cabo Drilling
The main advantage of trading using opposite Luxfer Holdings and Cabo Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Cabo Drilling 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 Cabo Drilling will offset losses from the drop in Cabo Drilling's long position.| Luxfer Holdings vs. Aquagold International | Luxfer Holdings vs. Morningstar Unconstrained Allocation | Luxfer Holdings vs. High Yield Municipal Fund | Luxfer Holdings vs. Thrivent High Yield |
| Cabo Drilling vs. Ascendant Resources | Cabo Drilling vs. Cantex Mine Development | Cabo Drilling vs. Amarc Resources | Cabo Drilling vs. Sterling Metals Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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