Correlation Between Lyxor 1 and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and GOLD ROAD 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 GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and GOLD ROAD RES, you can compare the effects of market volatilities on Lyxor 1 and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and GOLD ROAD.
Diversification Opportunities for Lyxor 1 and GOLD ROAD
Poor diversification
The 3 months correlation between Lyxor and GOLD is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and GOLD ROAD go up and down completely randomly.
Pair Corralation between Lyxor 1 and GOLD ROAD
Assuming the 90 days trading horizon Lyxor 1 is expected to under-perform the GOLD ROAD. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor 1 is 2.26 times less risky than GOLD ROAD. The etf trades about -0.06 of its potential returns per unit of risk. The GOLD ROAD RES is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 113.00 in GOLD ROAD RES on August 28, 2024 and sell it today you would lose (1.00) from holding GOLD ROAD RES or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. GOLD ROAD RES
Performance |
| Timeline |
| Lyxor 1 |
| GOLD ROAD RES |
Lyxor 1 and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and GOLD ROAD
The main advantage of trading using opposite Lyxor 1 and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD'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 |
| GOLD ROAD vs. FARO Technologies | GOLD ROAD vs. REGAL ASIAN INVESTMENTS | GOLD ROAD vs. MGIC INVESTMENT | GOLD ROAD vs. THORNEY TECHS LTD |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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