Correlation Between Lyxor 1 and Apple
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Apple Inc, you can compare the effects of market volatilities on Lyxor 1 and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Apple.
Diversification Opportunities for Lyxor 1 and Apple
Poor diversification
The 3 months correlation between Lyxor and Apple is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Apple go up and down completely randomly.
Pair Corralation between Lyxor 1 and Apple
Assuming the 90 days trading horizon Lyxor 1 is expected to under-perform the Apple. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor 1 is 1.41 times less risky than Apple. The etf trades about -0.09 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 21,325 in Apple Inc on August 24, 2024 and sell it today you would earn a total of 595.00 from holding Apple Inc or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lyxor 1 vs. Apple Inc
Performance |
| Timeline |
| Lyxor 1 |
| Apple Inc |
Lyxor 1 and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Apple
The main advantage of trading using opposite Lyxor 1 and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple'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 |
| Apple vs. FUYO GENERAL LEASE | Apple vs. United Rentals | Apple vs. Qurate Retail Series | Apple vs. National Retail Properties |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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