Correlation Between Luxfer Holdings and Taylor Devices
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Taylor Devices 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 Taylor Devices 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 Taylor Devices, you can compare the effects of market volatilities on Luxfer Holdings and Taylor Devices 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 Taylor Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Taylor Devices.
Diversification Opportunities for Luxfer Holdings and Taylor Devices
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Luxfer and Taylor is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Taylor Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taylor Devices 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 Taylor Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taylor Devices has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Taylor Devices go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Taylor Devices
Given the investment horizon of 90 days Luxfer Holdings is expected to generate 1.51 times less return on investment than Taylor Devices. But when comparing it to its historical volatility, Luxfer Holdings PLC is 1.56 times less risky than Taylor Devices. It trades about 0.09 of its potential returns per unit of risk. Taylor Devices is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,259 in Taylor Devices on August 24, 2024 and sell it today you would earn a total of 2,390 from holding Taylor Devices or generate 105.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Taylor Devices
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Taylor Devices |
Luxfer Holdings and Taylor Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Taylor Devices
The main advantage of trading using opposite Luxfer Holdings and Taylor Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Taylor Devices 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 Taylor Devices will offset losses from the drop in Taylor Devices' long position.| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
| Taylor Devices vs. Tennant Company | Taylor Devices vs. Kadant Inc | Taylor Devices vs. Enpro Industries | Taylor Devices vs. Luxfer Holdings PLC |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |