Correlation Between NATIONAL and Luxfer Holdings
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By analyzing existing cross correlation between NATIONAL RURAL UTILS and Luxfer Holdings PLC, you can compare the effects of market volatilities on NATIONAL 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 NATIONAL with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL and Luxfer Holdings.
Diversification Opportunities for NATIONAL and Luxfer Holdings
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NATIONAL and Luxfer is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL RURAL UTILS 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 NATIONAL 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 NATIONAL RURAL UTILS 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 NATIONAL i.e., NATIONAL and Luxfer Holdings go up and down completely randomly.
Pair Corralation between NATIONAL and Luxfer Holdings
Assuming the 90 days trading horizon NATIONAL RURAL UTILS is expected to generate 18.91 times more return on investment than Luxfer Holdings. However, NATIONAL is 18.91 times more volatile than Luxfer Holdings PLC. It trades about 0.04 of its potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.01 per unit of risk. If you would invest 9,477 in NATIONAL RURAL UTILS on November 19, 2024 and sell it today you would earn a total of 436.00 from holding NATIONAL RURAL UTILS or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 83.03% |
| Values | Daily Returns |
NATIONAL RURAL UTILS vs. Luxfer Holdings PLC
Performance |
| Timeline |
| NATIONAL RURAL UTILS |
| Luxfer Holdings PLC |
NATIONAL and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NATIONAL and Luxfer Holdings
The main advantage of trading using opposite NATIONAL and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATIONAL 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.| NATIONAL vs. National CineMedia | NATIONAL vs. JBG SMITH Properties | NATIONAL vs. The Peoples Insurance | NATIONAL vs. Life Insurance |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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