Correlation Between Kura Sushi and Luxfer Holdings

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

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

Diversification Opportunities for Kura Sushi and Luxfer Holdings

0.63

Correlation Coefficient

Kura Sushi  Luxfer Holdings

Poor diversification

The 3 months correlation between Kura and Luxfer is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA 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 Kura Sushi 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 Kura Sushi USA 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 Kura Sushi i.e., Kura Sushi and Luxfer Holdings go up and down completely randomly.

Pair Corralation between Kura Sushi and Luxfer Holdings

Given the investment horizon of 90 days Kura Sushi USA is expected to generate 1.33 times more return on investment than Luxfer Holdings. However, Kura Sushi is 1.33 times more volatile than Luxfer Holdings PLC. It trades about 0.09 of its potential returns per unit of risk. Luxfer Holdings PLC is currently generating about 0.04 per unit of risk. If you would invest  7,721  in Kura Sushi USA on October 1, 2024 and sell it today you would earn a total of  1,297  from holding Kura Sushi USA or generate 16.8% return on investment over 90 days.

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

Kura Sushi USA  vs.  Luxfer Holdings PLC

Kura Sushi USA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kura Sushi USA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kura Sushi unveiled solid returns over the last few months and may actually be approaching a breakup point.

Luxfer Holdings PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Luxfer Holdings PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Luxfer Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kura Sushi and Luxfer Holdings

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

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.