Correlation Between Lyxor 1 and Imperial Metals
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Imperial Metals 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 Imperial Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Imperial Metals, you can compare the effects of market volatilities on Lyxor 1 and Imperial Metals 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 Imperial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Imperial Metals.
Diversification Opportunities for Lyxor 1 and Imperial Metals
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and Imperial is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Imperial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Metals 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 Imperial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Metals has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Imperial Metals go up and down completely randomly.
Pair Corralation between Lyxor 1 and Imperial Metals
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 1.31 times less return on investment than Imperial Metals. But when comparing it to its historical volatility, Lyxor 1 is 3.8 times less risky than Imperial Metals. It trades about 0.15 of its potential returns per unit of risk. Imperial Metals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 118.00 in Imperial Metals on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Imperial Metals or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Lyxor 1 vs. Imperial Metals
Performance |
| Timeline |
| Lyxor 1 |
| Imperial Metals |
Lyxor 1 and Imperial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Imperial Metals
The main advantage of trading using opposite Lyxor 1 and Imperial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Imperial Metals 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 Imperial Metals will offset losses from the drop in Imperial Metals' 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 |
| Imperial Metals vs. Science Applications International | Imperial Metals vs. Nordic Semiconductor ASA | Imperial Metals vs. TOREX SEMICONDUCTOR LTD | Imperial Metals vs. MICRONIC MYDATA |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |