Correlation Between WisdomTree and Lyxor Core
Can any of the company-specific risk be diversified away by investing in both WisdomTree and Lyxor Core 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 WisdomTree and Lyxor Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree SP 500 and Lyxor Core Equity, you can compare the effects of market volatilities on WisdomTree and Lyxor Core 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 WisdomTree with a short position of Lyxor Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and Lyxor Core.
Diversification Opportunities for WisdomTree and Lyxor Core
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and Lyxor is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SP 500 and Lyxor Core Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Core Equity and WisdomTree 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 WisdomTree SP 500 are associated (or correlated) with Lyxor Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Core Equity has no effect on the direction of WisdomTree i.e., WisdomTree and Lyxor Core go up and down completely randomly.
Pair Corralation between WisdomTree and Lyxor Core
Assuming the 90 days trading horizon WisdomTree SP 500 is expected to under-perform the Lyxor Core. In addition to that, WisdomTree is 3.19 times more volatile than Lyxor Core Equity. It trades about -0.1 of its total potential returns per unit of risk. Lyxor Core Equity is currently generating about 0.19 per unit of volatility. If you would invest 2,110 in Lyxor Core Equity on August 31, 2024 and sell it today you would earn a total of 79.00 from holding Lyxor Core Equity or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree SP 500 vs. Lyxor Core Equity
Performance |
| Timeline |
| WisdomTree SP 500 |
| Lyxor Core Equity |
WisdomTree and Lyxor Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and Lyxor Core
The main advantage of trading using opposite WisdomTree and Lyxor Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree position performs unexpectedly, Lyxor Core 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 Lyxor Core will offset losses from the drop in Lyxor Core's long position.| WisdomTree vs. WisdomTree Zinc | WisdomTree vs. WisdomTree Brent Crude | WisdomTree vs. WisdomTree Aluminium 2x | WisdomTree vs. WisdomTree Enhanced Commodity |
| Lyxor Core vs. Lyxor Smart Overnight | Lyxor Core vs. Lyxor UCITS EuroMTS | Lyxor Core vs. Lyxor Core UK | Lyxor Core vs. Lyxor Core Global |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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