Correlation Between Lyxor 1 and CyberAgent
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and CyberAgent 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 CyberAgent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and CyberAgent, you can compare the effects of market volatilities on Lyxor 1 and CyberAgent 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 CyberAgent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and CyberAgent.
Diversification Opportunities for Lyxor 1 and CyberAgent
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and CyberAgent is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and CyberAgent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent 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 CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and CyberAgent go up and down completely randomly.
Pair Corralation between Lyxor 1 and CyberAgent
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 7.87 times less return on investment than CyberAgent. But when comparing it to its historical volatility, Lyxor 1 is 2.1 times less risky than CyberAgent. It trades about 0.06 of its potential returns per unit of risk. CyberAgent is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 590.00 in CyberAgent on August 31, 2024 and sell it today you would earn a total of 55.00 from holding CyberAgent or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. CyberAgent
Performance |
| Timeline |
| Lyxor 1 |
| CyberAgent |
Lyxor 1 and CyberAgent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and CyberAgent
The main advantage of trading using opposite Lyxor 1 and CyberAgent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, CyberAgent 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 CyberAgent will offset losses from the drop in CyberAgent'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 |
| CyberAgent vs. Publicis Groupe SA | CyberAgent vs. WPP PLC | CyberAgent vs. WPP PLC ADR | CyberAgent vs. Superior Plus Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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