Correlation Between Luxfer Holdings and Lipocine
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Lipocine 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 Lipocine 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 Lipocine, you can compare the effects of market volatilities on Luxfer Holdings and Lipocine 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 Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Lipocine.
Diversification Opportunities for Luxfer Holdings and Lipocine
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Luxfer and Lipocine is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine 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 Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Lipocine go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Lipocine
Given the investment horizon of 90 days Luxfer Holdings is expected to generate 1.14 times less return on investment than Lipocine. But when comparing it to its historical volatility, Luxfer Holdings PLC is 1.67 times less risky than Lipocine. It trades about 0.14 of its potential returns per unit of risk. Lipocine is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 365.00 in Lipocine on September 2, 2024 and sell it today you would earn a total of 89.00 from holding Lipocine or generate 24.38% 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. Lipocine
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Lipocine |
Luxfer Holdings and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Lipocine
The main advantage of trading using opposite Luxfer Holdings and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Lipocine 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 Lipocine will offset losses from the drop in Lipocine's long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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