Correlation Between Luxfer Holdings and Inter Parfums
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Inter Parfums 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 Inter Parfums 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 Inter Parfums, you can compare the effects of market volatilities on Luxfer Holdings and Inter Parfums 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 Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Inter Parfums.
Diversification Opportunities for Luxfer Holdings and Inter Parfums
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Luxfer and Inter is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums 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 Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Inter Parfums go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Inter Parfums
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 1.2 times more return on investment than Inter Parfums. However, Luxfer Holdings is 1.2 times more volatile than Inter Parfums. It trades about 0.22 of its potential returns per unit of risk. Inter Parfums is currently generating about 0.25 per unit of risk. If you would invest 1,306 in Luxfer Holdings PLC on November 5, 2024 and sell it today you would earn a total of 109.00 from holding Luxfer Holdings PLC or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Inter Parfums
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Inter Parfums |
Luxfer Holdings and Inter Parfums Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Inter Parfums
The main advantage of trading using opposite Luxfer Holdings and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Inter Parfums 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 Inter Parfums will offset losses from the drop in Inter Parfums' long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
| Inter Parfums vs. J J Snack | Inter Parfums vs. John B Sanfilippo | Inter Parfums vs. Innospec | Inter Parfums vs. Independent Bank |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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