Correlation Between Lyxor 1 and VPower Group
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and VPower Group 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 VPower Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and VPower Group International, you can compare the effects of market volatilities on Lyxor 1 and VPower Group 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 VPower Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and VPower Group.
Diversification Opportunities for Lyxor 1 and VPower Group
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and VPower is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and VPower Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VPower Group Interna 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 VPower Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VPower Group Interna has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and VPower Group go up and down completely randomly.
Pair Corralation between Lyxor 1 and VPower Group
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 6.92 times less return on investment than VPower Group. But when comparing it to its historical volatility, Lyxor 1 is 27.37 times less risky than VPower Group. It trades about 0.18 of its potential returns per unit of risk. VPower Group International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.40 in VPower Group International on September 22, 2024 and sell it today you would lose (0.20) from holding VPower Group International or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. VPower Group International
Performance |
| Timeline |
| Lyxor 1 |
| VPower Group Interna |
Lyxor 1 and VPower Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and VPower Group
The main advantage of trading using opposite Lyxor 1 and VPower Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, VPower Group 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 VPower Group will offset losses from the drop in VPower Group's long position.| Lyxor 1 vs. Lyxor Fed Funds | Lyxor 1 vs. Lyxor BofAML USD | Lyxor 1 vs. Lyxor Index Fund | Lyxor 1 vs. Lyxor 1 TecDAX |
| VPower Group vs. CARSALESCOM | VPower Group vs. Cars Inc | VPower Group vs. DICKER DATA LTD | VPower Group vs. Automatic Data Processing |
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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