Correlation Between Lyxor 1 and BANKINTER
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and BANKINTER 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 BANKINTER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and BANKINTER, you can compare the effects of market volatilities on Lyxor 1 and BANKINTER 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 BANKINTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and BANKINTER.
Diversification Opportunities for Lyxor 1 and BANKINTER
Excellent diversification
The 3 months correlation between Lyxor and BANKINTER is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and BANKINTER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER 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 BANKINTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and BANKINTER go up and down completely randomly.
Pair Corralation between Lyxor 1 and BANKINTER
Assuming the 90 days trading horizon Lyxor 1 is expected to under-perform the BANKINTER. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor 1 is 1.69 times less risky than BANKINTER. The etf trades about -0.03 of its potential returns per unit of risk. The BANKINTER is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 780.00 in BANKINTER on August 24, 2024 and sell it today you would lose (12.00) from holding BANKINTER or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. BANKINTER
Performance |
| Timeline |
| Lyxor 1 |
| BANKINTER |
Lyxor 1 and BANKINTER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and BANKINTER
The main advantage of trading using opposite Lyxor 1 and BANKINTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, BANKINTER 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 BANKINTER will offset losses from the drop in BANKINTER'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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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