Correlation Between X-FAB Silicon and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both X-FAB Silicon 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 X-FAB Silicon and Luxfer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Luxfer Holdings PLC, you can compare the effects of market volatilities on X-FAB Silicon 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 X-FAB Silicon with a short position of Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of X-FAB Silicon and Luxfer Holdings.
Diversification Opportunities for X-FAB Silicon and Luxfer Holdings
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between X-FAB and Luxfer is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries 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 X-FAB Silicon 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 X FAB Silicon Foundries 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 X-FAB Silicon i.e., X-FAB Silicon and Luxfer Holdings go up and down completely randomly.
Pair Corralation between X-FAB Silicon and Luxfer Holdings
Assuming the 90 days horizon X FAB Silicon Foundries is expected to under-perform the Luxfer Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, X FAB Silicon Foundries is 1.09 times less risky than Luxfer Holdings. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Luxfer Holdings PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 809.00 in Luxfer Holdings PLC on August 24, 2024 and sell it today you would earn a total of 595.00 from holding Luxfer Holdings PLC or generate 73.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Luxfer Holdings PLC
Performance |
| Timeline |
| X FAB Silicon |
| Luxfer Holdings PLC |
X-FAB Silicon and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X-FAB Silicon and Luxfer Holdings
The main advantage of trading using opposite X-FAB Silicon and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X-FAB Silicon 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.| X-FAB Silicon vs. NVIDIA | X-FAB Silicon vs. Intel | X-FAB Silicon vs. Taiwan Semiconductor Manufacturing | X-FAB Silicon vs. Marvell Technology Group |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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