Correlation Between Leverage Shares and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and Lyxor UCITS 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 Leverage Shares and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 2x and Lyxor UCITS iBoxx, you can compare the effects of market volatilities on Leverage Shares and Lyxor UCITS 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 Leverage Shares with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Lyxor UCITS.
Diversification Opportunities for Leverage Shares and Lyxor UCITS
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Leverage and Lyxor is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 2x and Lyxor UCITS iBoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS iBoxx and Leverage Shares 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 Leverage Shares 2x are associated (or correlated) with Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS iBoxx has no effect on the direction of Leverage Shares i.e., Leverage Shares and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Leverage Shares and Lyxor UCITS
Assuming the 90 days trading horizon Leverage Shares 2x is expected to under-perform the Lyxor UCITS. In addition to that, Leverage Shares is 4.42 times more volatile than Lyxor UCITS iBoxx. It trades about -0.05 of its total potential returns per unit of risk. Lyxor UCITS iBoxx is currently generating about 0.33 per unit of volatility. If you would invest 776,150 in Lyxor UCITS iBoxx on August 28, 2024 and sell it today you would earn a total of 26,450 from holding Lyxor UCITS iBoxx or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 2x vs. Lyxor UCITS iBoxx
Performance |
| Timeline |
| Leverage Shares 2x |
| Lyxor UCITS iBoxx |
Leverage Shares and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Lyxor UCITS
The main advantage of trading using opposite Leverage Shares and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, Lyxor UCITS 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 UCITS will offset losses from the drop in Lyxor UCITS's long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| Lyxor UCITS vs. Vanguard FTSE Developed | Lyxor UCITS vs. Leverage Shares 2x | Lyxor UCITS vs. Amundi Index Solutions | Lyxor UCITS vs. Amundi Index Solutions |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |