Correlation Between Lyxor 1 and BBVA Telecomunicacion
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By analyzing existing cross correlation between Lyxor 1 and BBVA Telecomunicaciones PP, you can compare the effects of market volatilities on Lyxor 1 and BBVA Telecomunicacion 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 BBVA Telecomunicacion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and BBVA Telecomunicacion.
Diversification Opportunities for Lyxor 1 and BBVA Telecomunicacion
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and BBVA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and BBVA Telecomunicaciones PP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBVA Telecomunicaciones 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 BBVA Telecomunicacion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBVA Telecomunicaciones has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and BBVA Telecomunicacion go up and down completely randomly.
Pair Corralation between Lyxor 1 and BBVA Telecomunicacion
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.65 times more return on investment than BBVA Telecomunicacion. However, Lyxor 1 is 1.54 times less risky than BBVA Telecomunicacion. It trades about 0.17 of its potential returns per unit of risk. BBVA Telecomunicaciones PP is currently generating about 0.09 per unit of risk. If you would invest 2,403 in Lyxor 1 on September 1, 2024 and sell it today you would earn a total of 69.00 from holding Lyxor 1 or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lyxor 1 vs. BBVA Telecomunicaciones PP
Performance |
| Timeline |
| Lyxor 1 |
| BBVA Telecomunicaciones |
Lyxor 1 and BBVA Telecomunicacion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and BBVA Telecomunicacion
The main advantage of trading using opposite Lyxor 1 and BBVA Telecomunicacion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, BBVA Telecomunicacion 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 BBVA Telecomunicacion will offset losses from the drop in BBVA Telecomunicacion'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 |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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