Correlation Between Luxfer Holdings and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and SEI Investments 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 SEI Investments 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 SEI Investments, you can compare the effects of market volatilities on Luxfer Holdings and SEI Investments 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 SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and SEI Investments.
Diversification Opportunities for Luxfer Holdings and SEI Investments
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Luxfer and SEI is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments 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 SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and SEI Investments go up and down completely randomly.
Pair Corralation between Luxfer Holdings and SEI Investments
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 2.59 times more return on investment than SEI Investments. However, Luxfer Holdings is 2.59 times more volatile than SEI Investments. It trades about 0.09 of its potential returns per unit of risk. SEI Investments is currently generating about 0.12 per unit of risk. If you would invest 855.00 in Luxfer Holdings PLC on September 3, 2024 and sell it today you would earn a total of 625.00 from holding Luxfer Holdings PLC or generate 73.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. SEI Investments
Performance |
| Timeline |
| Luxfer Holdings PLC |
| SEI Investments |
Luxfer Holdings and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and SEI Investments
The main advantage of trading using opposite Luxfer Holdings and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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