Correlation Between Lyxor 1 and INVITATION HOMES
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and INVITATION HOMES 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 INVITATION HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and INVITATION HOMES DL, you can compare the effects of market volatilities on Lyxor 1 and INVITATION HOMES 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 INVITATION HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and INVITATION HOMES.
Diversification Opportunities for Lyxor 1 and INVITATION HOMES
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and INVITATION is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and INVITATION HOMES DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVITATION HOMES 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 INVITATION HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVITATION HOMES has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and INVITATION HOMES go up and down completely randomly.
Pair Corralation between Lyxor 1 and INVITATION HOMES
Assuming the 90 days trading horizon Lyxor 1 is expected to under-perform the INVITATION HOMES. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor 1 is 2.07 times less risky than INVITATION HOMES. The etf trades about -0.06 of its potential returns per unit of risk. The INVITATION HOMES DL is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,080 in INVITATION HOMES DL on August 29, 2024 and sell it today you would earn a total of 160.00 from holding INVITATION HOMES DL or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. INVITATION HOMES DL
Performance |
| Timeline |
| Lyxor 1 |
| INVITATION HOMES |
Lyxor 1 and INVITATION HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and INVITATION HOMES
The main advantage of trading using opposite Lyxor 1 and INVITATION HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, INVITATION HOMES 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 INVITATION HOMES will offset losses from the drop in INVITATION HOMES'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 |
| INVITATION HOMES vs. Superior Plus Corp | INVITATION HOMES vs. NMI Holdings | INVITATION HOMES vs. Origin Agritech | INVITATION HOMES vs. SIVERS SEMICONDUCTORS AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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