Correlation Between Lyxor 1 and Euronext
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Euronext 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 Euronext into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Euronext NV, you can compare the effects of market volatilities on Lyxor 1 and Euronext 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 Euronext. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Euronext.
Diversification Opportunities for Lyxor 1 and Euronext
Very weak diversification
The 3 months correlation between Lyxor and Euronext is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Euronext NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronext NV 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 Euronext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronext NV has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Euronext go up and down completely randomly.
Pair Corralation between Lyxor 1 and Euronext
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.36 times more return on investment than Euronext. However, Lyxor 1 is 2.75 times less risky than Euronext. It trades about 0.35 of its potential returns per unit of risk. Euronext NV is currently generating about 0.1 per unit of risk. If you would invest 2,462 in Lyxor 1 on September 13, 2024 and sell it today you would earn a total of 124.00 from holding Lyxor 1 or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lyxor 1 vs. Euronext NV
Performance |
| Timeline |
| Lyxor 1 |
| Euronext NV |
Lyxor 1 and Euronext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Euronext
The main advantage of trading using opposite Lyxor 1 and Euronext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Euronext 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 Euronext will offset losses from the drop in Euronext'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 |
| Euronext vs. PT Bank Maybank | Euronext vs. JSC Halyk bank | Euronext vs. Aozora Bank | Euronext vs. Perseus Mining Limited |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |