Correlation Between Luxfer Holdings and JE Cleantech
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and JE Cleantech 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 JE Cleantech 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 JE Cleantech Holdings, you can compare the effects of market volatilities on Luxfer Holdings and JE Cleantech 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 JE Cleantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and JE Cleantech.
Diversification Opportunities for Luxfer Holdings and JE Cleantech
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luxfer and JCSE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and JE Cleantech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JE Cleantech Holdings 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 JE Cleantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JE Cleantech Holdings has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and JE Cleantech go up and down completely randomly.
Pair Corralation between Luxfer Holdings and JE Cleantech
Given the investment horizon of 90 days Luxfer Holdings is expected to generate 2.96 times less return on investment than JE Cleantech. But when comparing it to its historical volatility, Luxfer Holdings PLC is 3.45 times less risky than JE Cleantech. It trades about 0.08 of its potential returns per unit of risk. JE Cleantech Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 74.00 in JE Cleantech Holdings on September 14, 2024 and sell it today you would earn a total of 79.60 from holding JE Cleantech Holdings or generate 107.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. JE Cleantech Holdings
Performance |
| Timeline |
| Luxfer Holdings PLC |
| JE Cleantech Holdings |
Luxfer Holdings and JE Cleantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and JE Cleantech
The main advantage of trading using opposite Luxfer Holdings and JE Cleantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, JE Cleantech 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 JE Cleantech will offset losses from the drop in JE Cleantech's long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
| JE Cleantech vs. Enerpac Tool Group | JE Cleantech vs. China Yuchai International | JE Cleantech vs. Luxfer Holdings PLC | JE Cleantech 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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