Correlation Between Lyxor 1 and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Fevertree Drinks 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 Fevertree Drinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Fevertree Drinks Plc, you can compare the effects of market volatilities on Lyxor 1 and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Fevertree Drinks.
Diversification Opportunities for Lyxor 1 and Fevertree Drinks
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and Fevertree is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks Plc 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Lyxor 1 and Fevertree Drinks
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.43 times more return on investment than Fevertree Drinks. However, Lyxor 1 is 2.31 times less risky than Fevertree Drinks. It trades about 0.18 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.11 per unit of risk. If you would invest 2,423 in Lyxor 1 on September 2, 2024 and sell it today you would earn a total of 76.00 from holding Lyxor 1 or generate 3.14% 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. Fevertree Drinks Plc
Performance |
| Timeline |
| Lyxor 1 |
| Fevertree Drinks Plc |
Lyxor 1 and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Fevertree Drinks
The main advantage of trading using opposite Lyxor 1 and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' 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 |
| Fevertree Drinks vs. Yakult Honsha CoLtd | Fevertree Drinks vs. Coca Cola HBC | Fevertree Drinks vs. Coca Cola Consolidated | Fevertree Drinks vs. Britvic plc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |