Correlation Between Lyxor 1 and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Fast Retailing 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 Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Fast Retailing Co, you can compare the effects of market volatilities on Lyxor 1 and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Fast Retailing.
Diversification Opportunities for Lyxor 1 and Fast Retailing
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and Fast is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Fast Retailing go up and down completely randomly.
Pair Corralation between Lyxor 1 and Fast Retailing
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 5.32 times less return on investment than Fast Retailing. But when comparing it to its historical volatility, Lyxor 1 is 1.37 times less risky than Fast Retailing. It trades about 0.02 of its potential returns per unit of risk. Fast Retailing Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 19,500 in Fast Retailing Co on August 30, 2024 and sell it today you would earn a total of 12,160 from holding Fast Retailing Co or generate 62.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lyxor 1 vs. Fast Retailing Co
Performance |
| Timeline |
| Lyxor 1 |
| Fast Retailing |
Lyxor 1 and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Fast Retailing
The main advantage of trading using opposite Lyxor 1 and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing'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 |
| Fast Retailing vs. Flutter Entertainment PLC | Fast Retailing vs. Nufarm Limited | Fast Retailing vs. TOWNSQUARE MEDIA INC | Fast Retailing vs. GigaMedia |
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.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |