Correlation Between Lyxor UCITS and UST Inc
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and UST Inc 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 UCITS and UST Inc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS Dow and Multi Units Luxembourg , you can compare the effects of market volatilities on Lyxor UCITS and UST Inc 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 UCITS with a short position of UST Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and UST Inc.
Diversification Opportunities for Lyxor UCITS and UST Inc
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lyxor and UST is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Dow 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 UCITS 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 UCITS Dow are associated (or correlated) with UST Inc. 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 UCITS i.e., Lyxor UCITS and UST Inc go up and down completely randomly.
Pair Corralation between Lyxor UCITS and UST Inc
Assuming the 90 days trading horizon Lyxor UCITS is expected to generate 1.14 times less return on investment than UST Inc. But when comparing it to its historical volatility, Lyxor UCITS Dow is 1.42 times less risky than UST Inc. It trades about 0.16 of its potential returns per unit of risk. Multi Units Luxembourg is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,661 in Multi Units Luxembourg on September 1, 2024 and sell it today you would earn a total of 2,356 from holding Multi Units Luxembourg or generate 41.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Dow vs. Multi Units Luxembourg
Performance |
| Timeline |
| Lyxor UCITS Dow |
| Multi Units Luxembourg |
Lyxor UCITS and UST Inc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and UST Inc
The main advantage of trading using opposite Lyxor UCITS and UST Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, UST Inc 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 UST Inc will offset losses from the drop in UST Inc's long position.| Lyxor UCITS vs. Multi Units Luxembourg | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Lyxor MSCI China | Lyxor UCITS vs. Multi Units Luxembourg |
| UST Inc vs. Lyxor UCITS NASDAQ 100 | UST Inc vs. Lyxor UCITS Dow | UST Inc vs. Lyxor UCITS Stoxx | UST Inc vs. Lyxor UCITS MSCI |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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