Correlation Between IShares BRIC and Lyxor BEL
Can any of the company-specific risk be diversified away by investing in both IShares BRIC and Lyxor BEL 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 IShares BRIC and Lyxor BEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares BRIC 50 and Lyxor BEL 20, you can compare the effects of market volatilities on IShares BRIC and Lyxor BEL 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 IShares BRIC with a short position of Lyxor BEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares BRIC and Lyxor BEL.
Diversification Opportunities for IShares BRIC and Lyxor BEL
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Lyxor is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding iShares BRIC 50 and Lyxor BEL 20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor BEL 20 and IShares BRIC 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 iShares BRIC 50 are associated (or correlated) with Lyxor BEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor BEL 20 has no effect on the direction of IShares BRIC i.e., IShares BRIC and Lyxor BEL go up and down completely randomly.
Pair Corralation between IShares BRIC and Lyxor BEL
Assuming the 90 days trading horizon iShares BRIC 50 is expected to under-perform the Lyxor BEL. In addition to that, IShares BRIC is 1.78 times more volatile than Lyxor BEL 20. It trades about -0.2 of its total potential returns per unit of risk. Lyxor BEL 20 is currently generating about -0.05 per unit of volatility. If you would invest 6,358 in Lyxor BEL 20 on September 2, 2024 and sell it today you would lose (67.00) from holding Lyxor BEL 20 or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares BRIC 50 vs. Lyxor BEL 20
Performance |
| Timeline |
| iShares BRIC 50 |
| Lyxor BEL 20 |
IShares BRIC and Lyxor BEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares BRIC and Lyxor BEL
The main advantage of trading using opposite IShares BRIC and Lyxor BEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares BRIC position performs unexpectedly, Lyxor BEL 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 BEL will offset losses from the drop in Lyxor BEL's long position.| IShares BRIC vs. iShares Core SP | IShares BRIC vs. iShares Core MSCI | IShares BRIC vs. Lyxor UCITS Stoxx |
| Lyxor BEL vs. iShares II Public | Lyxor BEL vs. VanEck AEX UCITS | Lyxor BEL vs. Amundi Index Solutions | Lyxor BEL vs. Ackermans Van Haaren |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |