Correlation Between Sellas Life and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Sellas Life 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 Sellas Life and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sellas Life Sciences and Luxfer Holdings PLC, you can compare the effects of market volatilities on Sellas Life 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 Sellas Life with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Luxfer Holdings.
Diversification Opportunities for Sellas Life and Luxfer Holdings
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sellas and Luxfer is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences 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 Sellas Life 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 Sellas Life Sciences 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 Sellas Life i.e., Sellas Life and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Sellas Life and Luxfer Holdings
Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 6.4 times more return on investment than Luxfer Holdings. However, Sellas Life is 6.4 times more volatile than Luxfer Holdings PLC. It trades about 0.19 of its potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.22 per unit of risk. If you would invest 106.00 in Sellas Life Sciences on November 5, 2024 and sell it today you would earn a total of 42.00 from holding Sellas Life Sciences or generate 39.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sellas Life Sciences vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Sellas Life Sciences |
| Luxfer Holdings PLC |
Sellas Life and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Luxfer Holdings
The main advantage of trading using opposite Sellas Life and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life 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.| Sellas Life vs. NLS Pharmaceutics AG | Sellas Life vs. Mereo BioPharma Group | Sellas Life vs. Day One Biopharmaceuticals | Sellas Life vs. Reviva Pharmaceuticals Holdings |
| Luxfer Holdings vs. Graham | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Kadant Inc | Luxfer Holdings vs. Omega Flex |
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 Stocks Directory module to find actively traded stocks across global markets.
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