Correlation Between Luxfer Holdings and Diamond Estates
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Diamond Estates 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 Diamond Estates 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 Diamond Estates Wines, you can compare the effects of market volatilities on Luxfer Holdings and Diamond Estates 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 Diamond Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Diamond Estates.
Diversification Opportunities for Luxfer Holdings and Diamond Estates
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Luxfer and Diamond is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Diamond Estates Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Estates Wines 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 Diamond Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Estates Wines has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Diamond Estates go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Diamond Estates
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 3.13 times more return on investment than Diamond Estates. However, Luxfer Holdings is 3.13 times more volatile than Diamond Estates Wines. It trades about 0.09 of its potential returns per unit of risk. Diamond Estates Wines is currently generating about 0.03 per unit of risk. If you would invest 820.00 in Luxfer Holdings PLC on August 27, 2024 and sell it today you would earn a total of 602.00 from holding Luxfer Holdings PLC or generate 73.41% 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. Diamond Estates Wines
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Diamond Estates Wines |
Luxfer Holdings and Diamond Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Diamond Estates
The main advantage of trading using opposite Luxfer Holdings and Diamond Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Diamond Estates 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 Diamond Estates will offset losses from the drop in Diamond Estates' long position.| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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