Correlation Between Sligro Food and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Luxfer Holdings 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 Sligro Food and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and Luxfer Holdings PLC, you can compare the effects of market volatilities on Sligro Food and Luxfer Holdings 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 Sligro Food with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Luxfer Holdings.
Diversification Opportunities for Sligro Food and Luxfer Holdings
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sligro and Luxfer is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Luxfer Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luxfer Holdings PLC and Sligro Food 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 Sligro Food Group are associated (or correlated) with Luxfer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luxfer Holdings PLC has no effect on the direction of Sligro Food i.e., Sligro Food and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Sligro Food and Luxfer Holdings
Assuming the 90 days horizon Sligro Food Group is expected to under-perform the Luxfer Holdings. In addition to that, Sligro Food is 1.25 times more volatile than Luxfer Holdings PLC. It trades about -0.22 of its total potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.09 per unit of volatility. If you would invest 1,430 in Luxfer Holdings PLC on September 4, 2024 and sell it today you would earn a total of 50.00 from holding Luxfer Holdings PLC or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sligro Food Group vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Sligro Food Group |
| Luxfer Holdings PLC |
Sligro Food and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Luxfer Holdings
The main advantage of trading using opposite Sligro Food and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Luxfer Holdings 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 Luxfer Holdings will offset losses from the drop in Luxfer Holdings' long position.| Sligro Food vs. Entegris | Sligro Food vs. Playtech plc | Sligro Food vs. Everspin Technologies | Sligro Food vs. MACOM Technology Solutions |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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