Correlation Between Titan Machinery and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Titan Machinery 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 Titan Machinery and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Titan Machinery and Luxfer Holdings PLC, you can compare the effects of market volatilities on Titan Machinery 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 Titan Machinery with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Titan Machinery and Luxfer Holdings.
Diversification Opportunities for Titan Machinery and Luxfer Holdings
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Titan and Luxfer is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Titan Machinery 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 Titan Machinery 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 Titan Machinery 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 Titan Machinery i.e., Titan Machinery and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Titan Machinery and Luxfer Holdings
Given the investment horizon of 90 days Titan Machinery is expected to generate 1.08 times less return on investment than Luxfer Holdings. In addition to that, Titan Machinery is 1.08 times more volatile than Luxfer Holdings PLC. It trades about 0.17 of its total potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.2 per unit of volatility. If you would invest 1,275 in Luxfer Holdings PLC on August 30, 2024 and sell it today you would earn a total of 205.00 from holding Luxfer Holdings PLC or generate 16.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Titan Machinery vs. Luxfer Holdings PLC
Performance |
| Timeline |
| Titan Machinery |
| Luxfer Holdings PLC |
Titan Machinery and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Titan Machinery and Luxfer Holdings
The main advantage of trading using opposite Titan Machinery and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Titan Machinery 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.| Titan Machinery vs. DXP Enterprises | Titan Machinery vs. Watsco Inc | Titan Machinery vs. Distribution Solutions Group | Titan Machinery vs. SiteOne Landscape Supply |
| Luxfer Holdings vs. Illinois Tool Works | Luxfer Holdings vs. Pentair PLC | Luxfer Holdings vs. Emerson Electric | Luxfer Holdings vs. Smith AO |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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