Correlation Between Lyxor 1 and Brother Industries
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Brother Industries 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 Brother Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Brother Industries, you can compare the effects of market volatilities on Lyxor 1 and Brother Industries 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 Brother Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Brother Industries.
Diversification Opportunities for Lyxor 1 and Brother Industries
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and Brother is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Brother Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brother Industries 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 Brother Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brother Industries has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Brother Industries go up and down completely randomly.
Pair Corralation between Lyxor 1 and Brother Industries
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.52 times more return on investment than Brother Industries. However, Lyxor 1 is 1.92 times less risky than Brother Industries. It trades about 0.4 of its potential returns per unit of risk. Brother Industries is currently generating about -0.13 per unit of risk. If you would invest 2,504 in Lyxor 1 on October 25, 2024 and sell it today you would earn a total of 147.00 from holding Lyxor 1 or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. Brother Industries
Performance |
| Timeline |
| Lyxor 1 |
| Brother Industries |
Lyxor 1 and Brother Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Brother Industries
The main advantage of trading using opposite Lyxor 1 and Brother Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Brother Industries 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 Brother Industries will offset losses from the drop in Brother Industries' 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 |
| Brother Industries vs. WESANA HEALTH HOLD | Brother Industries vs. PURETECH HEALTH PLC | Brother Industries vs. Planet Fitness | Brother Industries vs. Synchrony Financial |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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