Correlation Between Lyxor 1 and Industria
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Industria 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 Industria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Industria de Diseno, you can compare the effects of market volatilities on Lyxor 1 and Industria 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 Industria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Industria.
Diversification Opportunities for Lyxor 1 and Industria
Very weak diversification
The 3 months correlation between Lyxor and Industria is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Industria de Diseno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industria de Diseno 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 Industria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industria de Diseno has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Industria go up and down completely randomly.
Pair Corralation between Lyxor 1 and Industria
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 5.26 times less return on investment than Industria. But when comparing it to its historical volatility, Lyxor 1 is 1.58 times less risky than Industria. It trades about 0.03 of its potential returns per unit of risk. Industria de Diseno is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,737 in Industria de Diseno on September 14, 2024 and sell it today you would earn a total of 1,206 from holding Industria de Diseno or generate 32.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Lyxor 1 vs. Industria de Diseno
Performance |
| Timeline |
| Lyxor 1 |
| Industria de Diseno |
Lyxor 1 and Industria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Industria
The main advantage of trading using opposite Lyxor 1 and Industria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Industria 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 Industria will offset losses from the drop in Industria'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 |
| Industria vs. PUBLIC STORAGE PRFO | Industria vs. Datang International Power | Industria vs. CVS Health | Industria vs. Cass Information Systems |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |