Correlation Between Lyxor 1 and Esso Public
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Esso Public 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 Esso Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Esso Public, you can compare the effects of market volatilities on Lyxor 1 and Esso Public 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 Esso Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Esso Public.
Diversification Opportunities for Lyxor 1 and Esso Public
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyxor and Esso is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Esso Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esso Public 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 Esso Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esso Public has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Esso Public go up and down completely randomly.
Pair Corralation between Lyxor 1 and Esso Public
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 4.63 times less return on investment than Esso Public. But when comparing it to its historical volatility, Lyxor 1 is 5.97 times less risky than Esso Public. It trades about 0.04 of its potential returns per unit of risk. Esso Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Esso Public on November 8, 2024 and sell it today you would earn a total of 2.00 from holding Esso Public or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
Lyxor 1 vs. Esso Public
Performance |
| Timeline |
| Lyxor 1 |
| Esso Public |
Lyxor 1 and Esso Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Esso Public
The main advantage of trading using opposite Lyxor 1 and Esso Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Esso Public 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 Esso Public will offset losses from the drop in Esso Public'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 |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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