Correlation Between Lyxor 10Y and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Lyxor 10Y 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 10Y 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 10Y Treasury and Lyxor UCITS Japan, you can compare the effects of market volatilities on Lyxor 10Y 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 10Y with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 10Y and Lyxor UCITS.
Diversification Opportunities for Lyxor 10Y and Lyxor UCITS
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and Lyxor is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 10Y Treasury and Lyxor UCITS Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Japan and Lyxor 10Y 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 10Y Treasury 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 Japan has no effect on the direction of Lyxor 10Y i.e., Lyxor 10Y and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Lyxor 10Y and Lyxor UCITS
Assuming the 90 days trading horizon Lyxor 10Y is expected to generate 1.65 times less return on investment than Lyxor UCITS. In addition to that, Lyxor 10Y is 1.08 times more volatile than Lyxor UCITS Japan. It trades about 0.04 of its total potential returns per unit of risk. Lyxor UCITS Japan is currently generating about 0.07 per unit of volatility. If you would invest 21,653 in Lyxor UCITS Japan on September 15, 2024 and sell it today you would earn a total of 257.00 from holding Lyxor UCITS Japan or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lyxor 10Y Treasury vs. Lyxor UCITS Japan
Performance |
| Timeline |
| Lyxor 10Y Treasury |
| Lyxor UCITS Japan |
Lyxor 10Y and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 10Y and Lyxor UCITS
The main advantage of trading using opposite Lyxor 10Y and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 10Y 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 10Y vs. Lyxor UCITS Japan | Lyxor 10Y vs. Lyxor UCITS Japan | Lyxor 10Y vs. Lyxor UCITS Stoxx | Lyxor 10Y vs. Amundi CAC 40 |
| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Amundi CAC 40 | Lyxor UCITS vs. Gold Bullion Securities |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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