Correlation Between Lyxor 1 and Cogobuy
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Cogobuy 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 Cogobuy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Cogobuy Group, you can compare the effects of market volatilities on Lyxor 1 and Cogobuy 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 Cogobuy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Cogobuy.
Diversification Opportunities for Lyxor 1 and Cogobuy
Poor diversification
The 3 months correlation between Lyxor and Cogobuy is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Cogobuy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogobuy Group 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 Cogobuy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogobuy Group has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Cogobuy go up and down completely randomly.
Pair Corralation between Lyxor 1 and Cogobuy
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.2 times more return on investment than Cogobuy. However, Lyxor 1 is 4.97 times less risky than Cogobuy. It trades about 0.18 of its potential returns per unit of risk. Cogobuy Group is currently generating about -0.12 per unit of risk. If you would invest 2,423 in Lyxor 1 on September 2, 2024 and sell it today you would earn a total of 76.00 from holding Lyxor 1 or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. Cogobuy Group
Performance |
| Timeline |
| Lyxor 1 |
| Cogobuy Group |
Lyxor 1 and Cogobuy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Cogobuy
The main advantage of trading using opposite Lyxor 1 and Cogobuy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Cogobuy 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 Cogobuy will offset losses from the drop in Cogobuy'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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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