Correlation Between Lyxor CAC and ETHetc ETC
Can any of the company-specific risk be diversified away by investing in both Lyxor CAC and ETHetc ETC 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 ETHetc ETC 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 ETHetc ETC, you can compare the effects of market volatilities on Lyxor CAC and ETHetc ETC 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 ETHetc ETC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor CAC and ETHetc ETC.
Diversification Opportunities for Lyxor CAC and ETHetc ETC
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyxor and ETHetc is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor CAC 40 and ETHetc ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETHetc ETC 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 ETHetc ETC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETHetc ETC has no effect on the direction of Lyxor CAC i.e., Lyxor CAC and ETHetc ETC go up and down completely randomly.
Pair Corralation between Lyxor CAC and ETHetc ETC
Assuming the 90 days trading horizon Lyxor CAC is expected to generate 71.33 times less return on investment than ETHetc ETC. But when comparing it to its historical volatility, Lyxor CAC 40 is 4.77 times less risky than ETHetc ETC. It trades about 0.0 of its potential returns per unit of risk. ETHetc ETC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,046 in ETHetc ETC on September 20, 2024 and sell it today you would earn a total of 1,434 from holding ETHetc ETC or generate 70.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor CAC 40 vs. ETHetc ETC
Performance |
| Timeline |
| Lyxor CAC 40 |
| ETHetc ETC |
Lyxor CAC and ETHetc ETC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor CAC and ETHetc ETC
The main advantage of trading using opposite Lyxor CAC and ETHetc ETC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor CAC position performs unexpectedly, ETHetc ETC 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 ETHetc ETC will offset losses from the drop in ETHetc ETC'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 |
| ETHetc ETC vs. Amundi Index Solutions | ETHetc ETC vs. Multi Units Luxembourg | ETHetc ETC vs. iShares Digital Entertainment | ETHetc ETC vs. Amundi Index Solutions |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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