Correlation Between 21S Stellar and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both 21S Stellar 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 21S Stellar and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 21S Stellar and Lyxor UCITS Japan, you can compare the effects of market volatilities on 21S Stellar 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 21S Stellar with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21S Stellar and Lyxor UCITS.
Diversification Opportunities for 21S Stellar and Lyxor UCITS
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 21S and Lyxor is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding 21S Stellar and Lyxor UCITS Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Japan and 21S Stellar 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 21S Stellar 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 Japan has no effect on the direction of 21S Stellar i.e., 21S Stellar and Lyxor UCITS go up and down completely randomly.
Pair Corralation between 21S Stellar and Lyxor UCITS
Assuming the 90 days trading horizon 21S Stellar is expected to generate 23.03 times more return on investment than Lyxor UCITS. However, 21S Stellar is 23.03 times more volatile than Lyxor UCITS Japan. It trades about 0.42 of its potential returns per unit of risk. Lyxor UCITS Japan is currently generating about 0.07 per unit of risk. If you would invest 406.00 in 21S Stellar on September 1, 2024 and sell it today you would earn a total of 1,642 from holding 21S Stellar or generate 404.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
21S Stellar vs. Lyxor UCITS Japan
Performance |
| Timeline |
| 21S Stellar |
| Lyxor UCITS Japan |
21S Stellar and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21S Stellar and Lyxor UCITS
The main advantage of trading using opposite 21S Stellar and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21S Stellar 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.| 21S Stellar vs. Lyxor UCITS Japan | 21S Stellar vs. Lyxor UCITS Japan | 21S Stellar vs. Lyxor UCITS Stoxx | 21S Stellar vs. Amundi CAC 40 |
| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Amundi Index Solutions | 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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