Correlation Between Luxfer Holdings and Mills Music
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Mills Music 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 Mills Music 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 Mills Music Trust, you can compare the effects of market volatilities on Luxfer Holdings and Mills Music 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 Mills Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Mills Music.
Diversification Opportunities for Luxfer Holdings and Mills Music
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luxfer and Mills is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Mills Music Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mills Music Trust 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 Mills Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mills Music Trust has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Mills Music go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Mills Music
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 0.74 times more return on investment than Mills Music. However, Luxfer Holdings PLC is 1.34 times less risky than Mills Music. It trades about 0.08 of its potential returns per unit of risk. Mills Music Trust is currently generating about 0.03 per unit of risk. If you would invest 1,144 in Luxfer Holdings PLC on September 2, 2024 and sell it today you would earn a total of 292.00 from holding Luxfer Holdings PLC or generate 25.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Mills Music Trust
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Mills Music Trust |
Luxfer Holdings and Mills Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Mills Music
The main advantage of trading using opposite Luxfer Holdings and Mills Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Mills Music 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 Mills Music will offset losses from the drop in Mills Music's long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
| Mills Music vs. Citrine Global Corp | Mills Music vs. Blue Water Ventures | Mills Music vs. DATA Communications Management | Mills Music vs. Aramark Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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