Correlation Between BBVA Accion and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both BBVA Accion 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 BBVA Accion and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBVA Accion DJ and Lyxor UCITS Ibex35, you can compare the effects of market volatilities on BBVA Accion 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 BBVA Accion with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBVA Accion and Lyxor UCITS.
Diversification Opportunities for BBVA Accion and Lyxor UCITS
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BBVA and Lyxor is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding BBVA Accion DJ and Lyxor UCITS Ibex35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Ibex35 and BBVA Accion 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 BBVA Accion DJ 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 Ibex35 has no effect on the direction of BBVA Accion i.e., BBVA Accion and Lyxor UCITS go up and down completely randomly.
Pair Corralation between BBVA Accion and Lyxor UCITS
Assuming the 90 days trading horizon BBVA Accion DJ is expected to under-perform the Lyxor UCITS. In addition to that, BBVA Accion is 1.09 times more volatile than Lyxor UCITS Ibex35. It trades about -0.15 of its total potential returns per unit of risk. Lyxor UCITS Ibex35 is currently generating about -0.04 per unit of volatility. If you would invest 12,195 in Lyxor UCITS Ibex35 on August 30, 2024 and sell it today you would lose (115.00) from holding Lyxor UCITS Ibex35 or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BBVA Accion DJ vs. Lyxor UCITS Ibex35
Performance |
| Timeline |
| BBVA Accion DJ |
| Lyxor UCITS Ibex35 |
BBVA Accion and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBVA Accion and Lyxor UCITS
The main advantage of trading using opposite BBVA Accion and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBVA Accion 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.| BBVA Accion vs. Metrovacesa SA | BBVA Accion vs. Endurance Motive SA | BBVA Accion vs. Mapfre | BBVA Accion vs. Amper SA |
| Lyxor UCITS vs. Metrovacesa SA | Lyxor UCITS vs. Endurance Motive SA | Lyxor UCITS vs. Mapfre | Lyxor UCITS vs. Amper SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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