Correlation Between Luxfer Holdings and Greenland Acquisition
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Greenland 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 Greenland 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 Greenland Acquisition Corp, you can compare the effects of market volatilities on Luxfer Holdings and Greenland 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 Greenland Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Greenland Acquisition.
Diversification Opportunities for Luxfer Holdings and Greenland Acquisition
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luxfer and Greenland is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Greenland Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenland Acquisition 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 Greenland Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenland Acquisition has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Greenland Acquisition go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Greenland Acquisition
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to under-perform the Greenland Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Luxfer Holdings PLC is 1.85 times less risky than Greenland Acquisition. The stock trades about -0.19 of its potential returns per unit of risk. The Greenland Acquisition Corp is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 226.00 in Greenland Acquisition Corp on September 14, 2024 and sell it today you would lose (14.00) from holding Greenland Acquisition Corp or give up 6.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Greenland Acquisition Corp
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Greenland Acquisition |
Luxfer Holdings and Greenland Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Greenland Acquisition
The main advantage of trading using opposite Luxfer Holdings and Greenland Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Greenland 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 Greenland Acquisition will offset losses from the drop in Greenland 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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