Correlation Between Lyxor CAC and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Lyxor CAC 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 Lyxor CAC and Lyxor UCITS 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 Lyxor UCITS Daily, you can compare the effects of market volatilities on Lyxor CAC 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 Lyxor CAC with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor CAC and Lyxor UCITS.
Diversification Opportunities for Lyxor CAC and Lyxor UCITS
-0.99 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lyxor and Lyxor is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor CAC 40 and Lyxor UCITS Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Daily 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 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 Daily has no effect on the direction of Lyxor CAC i.e., Lyxor CAC and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Lyxor CAC and Lyxor UCITS
Assuming the 90 days trading horizon Lyxor CAC 40 is expected to under-perform the Lyxor UCITS. In addition to that, Lyxor CAC is 1.02 times more volatile than Lyxor UCITS Daily. It trades about -0.23 of its total potential returns per unit of risk. Lyxor UCITS Daily is currently generating about 0.26 per unit of volatility. If you would invest 1,052 in Lyxor UCITS Daily on August 29, 2024 and sell it today you would earn a total of 56.00 from holding Lyxor UCITS Daily or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor CAC 40 vs. Lyxor UCITS Daily
Performance |
| Timeline |
| Lyxor CAC 40 |
| Lyxor UCITS Daily |
Lyxor CAC and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor CAC and Lyxor UCITS
The main advantage of trading using opposite Lyxor CAC and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor CAC 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.| Lyxor CAC vs. Amundi Index Solutions | Lyxor CAC vs. Manitou BF SA | Lyxor CAC vs. Ossiam Minimum Variance | Lyxor CAC vs. Ekinops SA |
| Lyxor UCITS vs. Lyxor UCITS CAC | Lyxor UCITS vs. Lyxor UCITS Daily | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Lyxor UCITS Stoxx |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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