Correlation Between Lyxor Commodities and Multi Units
Can any of the company-specific risk be diversified away by investing in both Lyxor Commodities and Multi Units 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 Commodities and Multi Units into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor Commodities RefinitivCoreCommodity and Multi Units Luxembourg, you can compare the effects of market volatilities on Lyxor Commodities and Multi Units 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 Commodities with a short position of Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Commodities and Multi Units.
Diversification Opportunities for Lyxor Commodities and Multi Units
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and Multi is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Commodities RefinitivCor and Multi Units Luxembourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units Luxembourg and Lyxor Commodities 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 Commodities RefinitivCoreCommodity are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units Luxembourg has no effect on the direction of Lyxor Commodities i.e., Lyxor Commodities and Multi Units go up and down completely randomly.
Pair Corralation between Lyxor Commodities and Multi Units
Assuming the 90 days trading horizon Lyxor Commodities RefinitivCoreCommodity is expected to under-perform the Multi Units. In addition to that, Lyxor Commodities is 1.21 times more volatile than Multi Units Luxembourg. It trades about -0.01 of its total potential returns per unit of risk. Multi Units Luxembourg is currently generating about 0.11 per unit of volatility. If you would invest 3,832 in Multi Units Luxembourg on September 3, 2024 and sell it today you would earn a total of 2,084 from holding Multi Units Luxembourg or generate 54.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lyxor Commodities RefinitivCor vs. Multi Units Luxembourg
Performance |
| Timeline |
| Lyxor Commodities |
| Multi Units Luxembourg |
Lyxor Commodities and Multi Units Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Commodities and Multi Units
The main advantage of trading using opposite Lyxor Commodities and Multi Units positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Commodities position performs unexpectedly, Multi Units 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 Multi Units will offset losses from the drop in Multi Units' long position.| Lyxor Commodities vs. Lyxor MSCI Brazil | Lyxor Commodities vs. Multi Units France | Lyxor Commodities vs. Lyxor UCITS Stoxx | Lyxor Commodities vs. Multi Units France |
| Multi Units vs. Amundi Index Solutions | Multi Units vs. Amundi Index Solutions | Multi Units vs. Manitou BF SA | Multi Units vs. Ossiam Minimum Variance |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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