Correlation Between Luxfer Holdings and Reliv International

Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Reliv International 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 Luxfer Holdings and Reliv International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Luxfer Holdings PLC and Reliv International, you can compare the effects of market volatilities on Luxfer Holdings and Reliv International 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 Luxfer Holdings with a short position of Reliv International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Reliv International.

Diversification Opportunities for Luxfer Holdings and Reliv International

-0.51

Correlation Coefficient

Luxfer Holdings  Reliv International

Excellent diversification

The 3 months correlation between Luxfer and Reliv is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Reliv International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliv International and Luxfer Holdings 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 Luxfer Holdings PLC are associated (or correlated) with Reliv International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliv International has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Reliv International go up and down completely randomly.

Pair Corralation between Luxfer Holdings and Reliv International

If you would invest  796.00  in Luxfer Holdings PLC on September 8, 2024 and sell it today you would earn a total of  587.00  from holding Luxfer Holdings PLC or generate 73.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.44%
Values	Daily Returns

Luxfer Holdings PLC  vs.  Reliv International

Luxfer Holdings PLC

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Luxfer Holdings PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Luxfer Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Reliv International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reliv International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Reliv International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Luxfer Holdings and Reliv International

The main advantage of trading using opposite Luxfer Holdings and Reliv International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Reliv International 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 Reliv International will offset losses from the drop in Reliv International's long position.

The idea behind Luxfer Holdings PLC and Reliv International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.