Correlation Between Luxfer Holdings and MRC Global
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and MRC Global 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 MRC Global 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 MRC Global, you can compare the effects of market volatilities on Luxfer Holdings and MRC Global 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 MRC Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and MRC Global.
Diversification Opportunities for Luxfer Holdings and MRC Global
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luxfer and MRC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and MRC Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRC Global 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 MRC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRC Global has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and MRC Global go up and down completely randomly.
Pair Corralation between Luxfer Holdings and MRC Global
Given the investment horizon of 90 days Luxfer Holdings is expected to generate 1.02 times less return on investment than MRC Global. But when comparing it to its historical volatility, Luxfer Holdings PLC is 1.0 times less risky than MRC Global. It trades about 0.17 of its potential returns per unit of risk. MRC Global is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,230 in MRC Global on August 24, 2024 and sell it today you would earn a total of 169.00 from holding MRC Global or generate 13.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. MRC Global
Performance |
| Timeline |
| Luxfer Holdings PLC |
| MRC Global |
Luxfer Holdings and MRC Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and MRC Global
The main advantage of trading using opposite Luxfer Holdings and MRC Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, MRC Global 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 MRC Global will offset losses from the drop in MRC Global's long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
| MRC Global vs. NOV Inc | MRC Global vs. Ranger Energy Services | MRC Global vs. Oil States International | MRC Global vs. Geospace Technologies |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |