Correlation Between Luxfer Holdings and Hurco Companies
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Hurco Companies 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 Hurco Companies 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 Hurco Companies, you can compare the effects of market volatilities on Luxfer Holdings and Hurco Companies 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 Hurco Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Hurco Companies.
Diversification Opportunities for Luxfer Holdings and Hurco Companies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luxfer and Hurco is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies 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 Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Hurco Companies go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Hurco Companies
Given the investment horizon of 90 days Luxfer Holdings is expected to generate 1.05 times less return on investment than Hurco Companies. But when comparing it to its historical volatility, Luxfer Holdings PLC is 1.59 times less risky than Hurco Companies. It trades about 0.13 of its potential returns per unit of risk. Hurco Companies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,919 in Hurco Companies on October 20, 2024 and sell it today you would earn a total of 83.00 from holding Hurco Companies or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Hurco Companies
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Hurco Companies |
Luxfer Holdings and Hurco Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Hurco Companies
The main advantage of trading using opposite Luxfer Holdings and Hurco Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Hurco Companies 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 Hurco Companies will offset losses from the drop in Hurco Companies' long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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