Correlation Between Luxfer Holdings and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on Luxfer Holdings and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Coca Cola.
Diversification Opportunities for Luxfer Holdings and Coca Cola
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Luxfer and Coca is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Coca Cola go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Coca Cola
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 3.17 times more return on investment than Coca Cola. However, Luxfer Holdings is 3.17 times more volatile than The Coca Cola. It trades about 0.02 of its potential returns per unit of risk. The Coca Cola is currently generating about 0.02 per unit of risk. If you would invest 1,276 in Luxfer Holdings PLC on August 30, 2024 and sell it today you would earn a total of 204.00 from holding Luxfer Holdings PLC or generate 15.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. The Coca Cola
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Coca Cola |
Luxfer Holdings and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Coca Cola
The main advantage of trading using opposite Luxfer Holdings and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Luxfer Holdings vs. Illinois Tool Works | Luxfer Holdings vs. Pentair PLC | Luxfer Holdings vs. Emerson Electric | Luxfer Holdings vs. Smith AO |
| Coca Cola vs. Coca Cola Consolidated | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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