Correlation Between Luxfer Holdings and Nova Minerals
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Nova Minerals 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 Nova Minerals 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 Nova Minerals Limited, you can compare the effects of market volatilities on Luxfer Holdings and Nova Minerals 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 Nova Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Nova Minerals.
Diversification Opportunities for Luxfer Holdings and Nova Minerals
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Luxfer and Nova is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Nova Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Minerals Limited 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 Nova Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Minerals Limited has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Nova Minerals go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Nova Minerals
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 0.26 times more return on investment than Nova Minerals. However, Luxfer Holdings PLC is 3.88 times less risky than Nova Minerals. It trades about -0.16 of its potential returns per unit of risk. Nova Minerals Limited is currently generating about -0.05 per unit of risk. If you would invest 1,401 in Luxfer Holdings PLC on November 28, 2024 and sell it today you would lose (115.00) from holding Luxfer Holdings PLC or give up 8.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Nova Minerals Limited
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Nova Minerals Limited |
Luxfer Holdings and Nova Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Nova Minerals
The main advantage of trading using opposite Luxfer Holdings and Nova Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Nova Minerals 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 Nova Minerals will offset losses from the drop in Nova Minerals' long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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