Correlation Between Lyxor 1 and Big Yellow
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Big Yellow 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 Big Yellow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Big Yellow Group, you can compare the effects of market volatilities on Lyxor 1 and Big Yellow 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 Big Yellow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Big Yellow.
Diversification Opportunities for Lyxor 1 and Big Yellow
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyxor and Big is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Big Yellow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Yellow 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 Big Yellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Yellow Group has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Big Yellow go up and down completely randomly.
Pair Corralation between Lyxor 1 and Big Yellow
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.63 times more return on investment than Big Yellow. However, Lyxor 1 is 1.58 times less risky than Big Yellow. It trades about 0.06 of its potential returns per unit of risk. Big Yellow Group is currently generating about -0.14 per unit of risk. If you would invest 2,415 in Lyxor 1 on September 3, 2024 and sell it today you would earn a total of 84.00 from holding Lyxor 1 or generate 3.48% 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. Big Yellow Group
Performance |
| Timeline |
| Lyxor 1 |
| Big Yellow Group |
Lyxor 1 and Big Yellow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Big Yellow
The main advantage of trading using opposite Lyxor 1 and Big Yellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Big Yellow 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 Big Yellow will offset losses from the drop in Big Yellow'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 |
| Big Yellow vs. Zoom Video Communications | Big Yellow vs. Choice Hotels International | Big Yellow vs. MELIA HOTELS | Big Yellow vs. NH HOTEL GROUP |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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