Correlation Between Lyxor CAC and IShares V
Can any of the company-specific risk be diversified away by investing in both Lyxor CAC and IShares V 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 V 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 V PLC, you can compare the effects of market volatilities on Lyxor CAC and IShares V 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 V. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor CAC and IShares V.
Diversification Opportunities for Lyxor CAC and IShares V
Excellent diversification
The 3 months correlation between Lyxor and IShares is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor CAC 40 and iShares V PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares V PLC 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 V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares V PLC has no effect on the direction of Lyxor CAC i.e., Lyxor CAC and IShares V go up and down completely randomly.
Pair Corralation between Lyxor CAC and IShares V
Assuming the 90 days trading horizon Lyxor CAC 40 is expected to generate 5.21 times more return on investment than IShares V. However, Lyxor CAC is 5.21 times more volatile than iShares V PLC. It trades about 0.04 of its potential returns per unit of risk. iShares V PLC is currently generating about 0.16 per unit of risk. If you would invest 2,984 in Lyxor CAC 40 on September 19, 2024 and sell it today you would earn a total of 563.00 from holding Lyxor CAC 40 or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.55% |
| Values | Daily Returns |
Lyxor CAC 40 vs. iShares V PLC
Performance |
| Timeline |
| Lyxor CAC 40 |
| iShares V PLC |
Lyxor CAC and IShares V Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor CAC and IShares V
The main advantage of trading using opposite Lyxor CAC and IShares V positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor CAC position performs unexpectedly, IShares V 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 V will offset losses from the drop in IShares V's 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 V vs. Lyxor UCITS Japan | IShares V vs. Lyxor UCITS Japan | IShares V vs. Lyxor UCITS Stoxx | IShares V 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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