Correlation Between Lyxor CAC and IShares IBonds
Can any of the company-specific risk be diversified away by investing in both Lyxor CAC and IShares IBonds 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 Lyxor CAC and IShares IBonds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor CAC 40 and iShares iBonds Dec, you can compare the effects of market volatilities on Lyxor CAC and IShares IBonds 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 Lyxor CAC with a short position of IShares IBonds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor CAC and IShares IBonds.
Diversification Opportunities for Lyxor CAC and IShares IBonds
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and IShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor CAC 40 and iShares iBonds Dec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBonds Dec and Lyxor CAC 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 Lyxor CAC 40 are associated (or correlated) with IShares IBonds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBonds Dec has no effect on the direction of Lyxor CAC i.e., Lyxor CAC and IShares IBonds go up and down completely randomly.
Pair Corralation between Lyxor CAC and IShares IBonds
Assuming the 90 days trading horizon Lyxor CAC 40 is expected to under-perform the IShares IBonds. In addition to that, Lyxor CAC is 3.48 times more volatile than iShares iBonds Dec. It trades about -0.05 of its total potential returns per unit of risk. iShares iBonds Dec is currently generating about 0.08 per unit of volatility. If you would invest 543.00 in iShares iBonds Dec on September 20, 2024 and sell it today you would earn a total of 4.00 from holding iShares iBonds Dec or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor CAC 40 vs. iShares iBonds Dec
Performance |
| Timeline |
| Lyxor CAC 40 |
| iShares iBonds Dec |
Lyxor CAC and IShares IBonds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor CAC and IShares IBonds
The main advantage of trading using opposite Lyxor CAC and IShares IBonds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor CAC position performs unexpectedly, IShares IBonds 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 IShares IBonds will offset losses from the drop in IShares IBonds' long position.| Lyxor CAC vs. Lyxor UCITS Japan | Lyxor CAC vs. Lyxor UCITS Japan | Lyxor CAC vs. Lyxor UCITS Stoxx | Lyxor CAC vs. Gold Bullion Securities |
| IShares IBonds vs. Lyxor UCITS Japan | IShares IBonds vs. Lyxor UCITS Japan | IShares IBonds vs. Lyxor UCITS Stoxx | IShares IBonds vs. Amundi CAC 40 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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