Correlation Between Lyxor 1 and JD
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and JD 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 1 and JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and JD Inc, you can compare the effects of market volatilities on Lyxor 1 and JD 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 1 with a short position of JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and JD.
Diversification Opportunities for Lyxor 1 and JD
Very weak diversification
The 3 months correlation between Lyxor and JD is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and JD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc and Lyxor 1 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 1 are associated (or correlated) with JD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Inc has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and JD go up and down completely randomly.
Pair Corralation between Lyxor 1 and JD
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.3 times more return on investment than JD. However, Lyxor 1 is 3.38 times less risky than JD. It trades about 0.02 of its potential returns per unit of risk. JD Inc is currently generating about -0.01 per unit of risk. If you would invest 2,318 in Lyxor 1 on August 31, 2024 and sell it today you would earn a total of 154.00 from holding Lyxor 1 or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lyxor 1 vs. JD Inc
Performance |
| Timeline |
| Lyxor 1 |
| JD Inc |
Lyxor 1 and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and JD
The main advantage of trading using opposite Lyxor 1 and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, JD 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 JD will offset losses from the drop in JD's long position.| Lyxor 1 vs. Lyxor Fed Funds | Lyxor 1 vs. Lyxor BofAML USD | Lyxor 1 vs. Lyxor 1 TecDAX | Lyxor 1 vs. Lyxor UCITS EuroMTS |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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