Correlation Between Luxfer Holdings and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Teleflex Incorporated 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 Teleflex Incorporated 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 Teleflex Incorporated, you can compare the effects of market volatilities on Luxfer Holdings and Teleflex Incorporated 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 Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Teleflex Incorporated.
Diversification Opportunities for Luxfer Holdings and Teleflex Incorporated
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Luxfer and Teleflex is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated 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 Teleflex Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleflex Incorporated has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Teleflex Incorporated
Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 1.07 times more return on investment than Teleflex Incorporated. However, Luxfer Holdings is 1.07 times more volatile than Teleflex Incorporated. It trades about 0.11 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.21 per unit of risk. If you would invest 1,275 in Luxfer Holdings PLC on August 28, 2024 and sell it today you would earn a total of 159.00 from holding Luxfer Holdings PLC or generate 12.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Teleflex Incorporated
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Teleflex Incorporated |
Luxfer Holdings and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Teleflex Incorporated
The main advantage of trading using opposite Luxfer Holdings and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Teleflex Incorporated 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 Teleflex Incorporated will offset losses from the drop in Teleflex Incorporated's long position.| Luxfer Holdings vs. Aquagold International | Luxfer Holdings vs. Morningstar Unconstrained Allocation | Luxfer Holdings vs. High Yield Municipal Fund | Luxfer Holdings vs. Thrivent High Yield |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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