Correlation Between Bright Scholar and Luxfer Holdings

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

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

Diversification Opportunities for Bright Scholar and Luxfer Holdings

0.44

Correlation Coefficient

Bright Scholar  Luxfer Holdings

Very weak diversification

The 3 months correlation between Bright and Luxfer is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education 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 Bright Scholar 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 Bright Scholar Education 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 Bright Scholar i.e., Bright Scholar and Luxfer Holdings go up and down completely randomly.

Pair Corralation between Bright Scholar and Luxfer Holdings

Given the investment horizon of 90 days Bright Scholar Education is expected to generate 2.04 times more return on investment than Luxfer Holdings. However, Bright Scholar is 2.04 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 0.03 per unit of risk. If you would invest  161.00  in Bright Scholar Education on May 7, 2025 and sell it today you would earn a total of  9.00  from holding Bright Scholar Education or generate 5.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bright Scholar Education  vs.  Luxfer Holdings PLC

Bright Scholar Education

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Bright Scholar Education are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Bright Scholar may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Luxfer Holdings PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Luxfer Holdings PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Luxfer Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bright Scholar and Luxfer Holdings

The main advantage of trading using opposite Bright Scholar and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar 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.

The idea behind Bright Scholar Education and Luxfer Holdings PLC 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.