Correlation Between Luxfer Holdings and Ivanhoe Electric
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Ivanhoe Electric 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 Ivanhoe Electric 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 Ivanhoe Electric, you can compare the effects of market volatilities on Luxfer Holdings and Ivanhoe Electric 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 Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Ivanhoe Electric.
Diversification Opportunities for Luxfer Holdings and Ivanhoe Electric
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luxfer and Ivanhoe is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric 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 Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Ivanhoe Electric go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Ivanhoe Electric
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 0.52 times more return on investment than Ivanhoe Electric. However, Luxfer Holdings PLC is 1.93 times less risky than Ivanhoe Electric. It trades about 0.04 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.17 per unit of risk. If you would invest 1,459 in Luxfer Holdings PLC on August 31, 2024 and sell it today you would earn a total of 21.00 from holding Luxfer Holdings PLC or generate 1.44% 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. Ivanhoe Electric
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Ivanhoe Electric |
Luxfer Holdings and Ivanhoe Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Ivanhoe Electric
The main advantage of trading using opposite Luxfer Holdings and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Ivanhoe Electric 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 Ivanhoe Electric will offset losses from the drop in Ivanhoe Electric's long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
| Ivanhoe Electric vs. Canlan Ice Sports | Ivanhoe Electric vs. Univest Pennsylvania | Ivanhoe Electric vs. Yuexiu Transport Infrastructure | Ivanhoe Electric vs. Procter Gamble |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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