Correlation Between Luxfer Holdings and Dana
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Dana 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 Dana 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 Dana Inc, you can compare the effects of market volatilities on Luxfer Holdings and Dana 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 Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Dana.
Diversification Opportunities for Luxfer Holdings and Dana
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Luxfer and Dana is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc 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 Dana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Inc has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Dana go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Dana
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 0.98 times more return on investment than Dana. However, Luxfer Holdings PLC is 1.02 times less risky than Dana. It trades about 0.02 of its potential returns per unit of risk. Dana Inc is currently generating about -0.02 per unit of risk. If you would invest 1,276 in Luxfer Holdings PLC on August 30, 2024 and sell it today you would earn a total of 204.00 from holding Luxfer Holdings PLC or generate 15.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Dana Inc
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Dana Inc |
Luxfer Holdings and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Dana
The main advantage of trading using opposite Luxfer Holdings and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Dana 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 Dana will offset losses from the drop in Dana's long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Hurco Companies |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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