Correlation Between Lyxor UCITS and Lyxor MSCI
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Lyxor MSCI 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 Lyxor MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS Daily and Lyxor MSCI China, you can compare the effects of market volatilities on Lyxor UCITS and Lyxor MSCI 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 Lyxor MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Lyxor MSCI.
Diversification Opportunities for Lyxor UCITS and Lyxor MSCI
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lyxor and Lyxor is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Daily and Lyxor MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor MSCI China 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 Daily are associated (or correlated) with Lyxor MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor MSCI China has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Lyxor MSCI go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Lyxor MSCI
Assuming the 90 days trading horizon Lyxor UCITS Daily is expected to under-perform the Lyxor MSCI. In addition to that, Lyxor UCITS is 1.04 times more volatile than Lyxor MSCI China. It trades about -0.05 of its total potential returns per unit of risk. Lyxor MSCI China is currently generating about 0.0 per unit of volatility. If you would invest 8,909 in Lyxor MSCI China on September 2, 2024 and sell it today you would lose (276.00) from holding Lyxor MSCI China or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Daily vs. Lyxor MSCI China
Performance |
| Timeline |
| Lyxor UCITS Daily |
| Lyxor MSCI China |
Lyxor UCITS and Lyxor MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Lyxor MSCI
The main advantage of trading using opposite Lyxor UCITS and Lyxor MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Lyxor MSCI 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 MSCI will offset losses from the drop in Lyxor MSCI's long position.| Lyxor UCITS vs. Lyxor UCITS CAC | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Lyxor SP 500 | Lyxor UCITS vs. Lyxor UCITS Daily |
| Lyxor MSCI vs. Manitou BF SA | Lyxor MSCI vs. Granite 3x LVMH | Lyxor MSCI vs. 21Shares Polkadot ETP | Lyxor MSCI vs. Ekinops SA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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