Correlation Between Luxfer Holdings and DHC Acquisition
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and DHC Acquisition 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 DHC Acquisition 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 DHC Acquisition Corp, you can compare the effects of market volatilities on Luxfer Holdings and DHC Acquisition 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 DHC Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and DHC Acquisition.
Diversification Opportunities for Luxfer Holdings and DHC Acquisition
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luxfer and DHC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and DHC Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHC Acquisition 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 DHC Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHC Acquisition Corp has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and DHC Acquisition go up and down completely randomly.
Pair Corralation between Luxfer Holdings and DHC Acquisition
If you would invest 1,183 in Luxfer Holdings PLC on September 1, 2024 and sell it today you would earn a total of 253.00 from holding Luxfer Holdings PLC or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. DHC Acquisition Corp
Performance |
| Timeline |
| Luxfer Holdings PLC |
| DHC Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Luxfer Holdings and DHC Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and DHC Acquisition
The main advantage of trading using opposite Luxfer Holdings and DHC Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, DHC Acquisition 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 DHC Acquisition will offset losses from the drop in DHC Acquisition's long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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