Correlation Between Lyxor 1 and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and LIFENET INSURANCE 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 LIFENET INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and LIFENET INSURANCE CO, you can compare the effects of market volatilities on Lyxor 1 and LIFENET INSURANCE 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 LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and LIFENET INSURANCE.
Diversification Opportunities for Lyxor 1 and LIFENET INSURANCE
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lyxor and LIFENET is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE 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 LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between Lyxor 1 and LIFENET INSURANCE
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 13.08 times less return on investment than LIFENET INSURANCE. But when comparing it to its historical volatility, Lyxor 1 is 2.76 times less risky than LIFENET INSURANCE. It trades about 0.01 of its potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 745.00 in LIFENET INSURANCE CO on August 24, 2024 and sell it today you would earn a total of 455.00 from holding LIFENET INSURANCE CO or generate 61.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lyxor 1 vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| Lyxor 1 |
| LIFENET INSURANCE |
Lyxor 1 and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and LIFENET INSURANCE
The main advantage of trading using opposite Lyxor 1 and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE'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 |
| LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX | LIFENET INSURANCE vs. Xtrackers LevDAX |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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