Correlation Between Lyxor 1 and SCANDMEDICAL SOLDK
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on Lyxor 1 and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and SCANDMEDICAL SOLDK.
Diversification Opportunities for Lyxor 1 and SCANDMEDICAL SOLDK
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lyxor and SCANDMEDICAL is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 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 SCANDMEDICAL SOLDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and SCANDMEDICAL SOLDK go up and down completely randomly.
Pair Corralation between Lyxor 1 and SCANDMEDICAL SOLDK
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.38 times more return on investment than SCANDMEDICAL SOLDK. However, Lyxor 1 is 2.63 times less risky than SCANDMEDICAL SOLDK. It trades about 0.05 of its potential returns per unit of risk. SCANDMEDICAL SOLDK 040 is currently generating about -0.04 per unit of risk. If you would invest 2,532 in Lyxor 1 on November 21, 2024 and sell it today you would earn a total of 222.00 from holding Lyxor 1 or generate 8.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 97.37% |
Values | Daily Returns |
Lyxor 1 vs. SCANDMEDICAL SOLDK 040
Performance |
Timeline |
Lyxor 1 |
Risk-Adjusted Performance
Solid
Weak | Strong |
SCANDMEDICAL SOLDK 040 |
Lyxor 1 and SCANDMEDICAL SOLDK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lyxor 1 and SCANDMEDICAL SOLDK
The main advantage of trading using opposite Lyxor 1 and SCANDMEDICAL SOLDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK will offset losses from the drop in SCANDMEDICAL SOLDK's long position.The idea behind Lyxor 1 and SCANDMEDICAL SOLDK 040 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.SCANDMEDICAL SOLDK vs. High Liner Foods | ||
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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