Correlation Between Luxfer Holdings and Standard
Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Standard 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 Standard 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 Standard Motor Products, you can compare the effects of market volatilities on Luxfer Holdings and Standard 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 Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Standard.
Diversification Opportunities for Luxfer Holdings and Standard
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Luxfer and Standard is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Standard Motor Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Motor Products 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 Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Motor Products has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Standard go up and down completely randomly.
Pair Corralation between Luxfer Holdings and Standard
Given the investment horizon of 90 days Luxfer Holdings is expected to generate 1.63 times less return on investment than Standard. But when comparing it to its historical volatility, Luxfer Holdings PLC is 1.26 times less risky than Standard. It trades about 0.16 of its potential returns per unit of risk. Standard Motor Products is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,887 in Standard Motor Products on June 2, 2025 and sell it today you would earn a total of 994.00 from holding Standard Motor Products or generate 34.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Luxfer Holdings PLC vs. Standard Motor Products
Performance |
| Timeline |
| Luxfer Holdings PLC |
| Standard Motor Products |
Luxfer Holdings and Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luxfer Holdings and Standard
The main advantage of trading using opposite Luxfer Holdings and Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luxfer Holdings position performs unexpectedly, Standard 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 Standard will offset losses from the drop in Standard's long position.| Luxfer Holdings vs. Hurco Companies | Luxfer Holdings vs. Enerpac Tool Group | Luxfer Holdings vs. Enpro Industries | Luxfer Holdings vs. Omega Flex |
| Standard vs. Dorman Products | Standard vs. Motorcar Parts of | Standard vs. Douglas Dynamics | Standard vs. Stoneridge |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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