Correlation Between Lyxor 1 and Gerresheimer
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Gerresheimer 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 Gerresheimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Gerresheimer AG, you can compare the effects of market volatilities on Lyxor 1 and Gerresheimer 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 Gerresheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Gerresheimer.
Diversification Opportunities for Lyxor 1 and Gerresheimer
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyxor and Gerresheimer is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Gerresheimer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerresheimer AG 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 Gerresheimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gerresheimer AG has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Gerresheimer go up and down completely randomly.
Pair Corralation between Lyxor 1 and Gerresheimer
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.41 times more return on investment than Gerresheimer. However, Lyxor 1 is 2.42 times less risky than Gerresheimer. It trades about 0.18 of its potential returns per unit of risk. Gerresheimer AG 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. Gerresheimer AG
Performance |
| Timeline |
| Lyxor 1 |
| Gerresheimer AG |
Lyxor 1 and Gerresheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Gerresheimer
The main advantage of trading using opposite Lyxor 1 and Gerresheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Gerresheimer 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 Gerresheimer will offset losses from the drop in Gerresheimer'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 |
| Gerresheimer vs. ESSILORLUXOTTICA 12ON | Gerresheimer vs. Intuitive Surgical | Gerresheimer vs. EssilorLuxottica Socit anonyme | Gerresheimer vs. HOYA Corporation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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