Correlation Between Luxfer Holdings and Tianjin Capital

Can any of the company-specific risk be diversified away by investing in both Luxfer Holdings and Tianjin Capital 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 Tianjin Capital 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 Tianjin Capital Environmental, you can compare the effects of market volatilities on Luxfer Holdings and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luxfer Holdings and Tianjin Capital.

Diversification Opportunities for Luxfer Holdings and Tianjin Capital

0.34

Correlation Coefficient

Luxfer Holdings  Tianjin Capital

Weak diversification

The 3 months correlation between Luxfer and Tianjin is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Luxfer Holdings PLC and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Luxfer Holdings i.e., Luxfer Holdings and Tianjin Capital go up and down completely randomly.

Pair Corralation between Luxfer Holdings and Tianjin Capital

Given the investment horizon of 90 days Luxfer Holdings PLC is expected to generate 2.96 times more return on investment than Tianjin Capital. However, Luxfer Holdings is 2.96 times more volatile than Tianjin Capital Environmental. It trades about 0.06 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.13 per unit of risk. If you would invest  1,104  in Luxfer Holdings PLC on May 7, 2025 and sell it today you would earn a total of  79.00  from holding Luxfer Holdings PLC or generate 7.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Luxfer Holdings PLC  vs.  Tianjin Capital Environmental

Luxfer Holdings PLC

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Luxfer Holdings PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Luxfer Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Tianjin Capital Envi

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Capital Environmental are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Tianjin Capital is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Luxfer Holdings and Tianjin Capital

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

The idea behind Luxfer Holdings PLC and Tianjin Capital Environmental 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.