Correlation Between Lyxor 1 and SILICON LABORATOR

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and SILICON LABORATOR 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 SILICON LABORATOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and SILICON LABORATOR, you can compare the effects of market volatilities on Lyxor 1 and SILICON LABORATOR 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 SILICON LABORATOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and SILICON LABORATOR.

Diversification Opportunities for Lyxor 1 and SILICON LABORATOR

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Lyxor and SILICON is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and SILICON LABORATOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILICON LABORATOR 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 SILICON LABORATOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILICON LABORATOR has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and SILICON LABORATOR go up and down completely randomly.

Pair Corralation between Lyxor 1 and SILICON LABORATOR

Assuming the 90 days trading horizon Lyxor 1 is expected to generate 3.23 times less return on investment than SILICON LABORATOR. But when comparing it to its historical volatility, Lyxor 1 is 3.7 times less risky than SILICON LABORATOR. It trades about 0.08 of its potential returns per unit of risk. SILICON LABORATOR is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  10,900  in SILICON LABORATOR on October 25, 2024 and sell it today you would earn a total of  2,400  from holding SILICON LABORATOR or generate 22.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Lyxor 1   vs.  SILICON LABORATOR

 Performance 
       Timeline  
Lyxor 1 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor 1 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Lyxor 1 may actually be approaching a critical reversion point that can send shares even higher in February 2025.
SILICON LABORATOR 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SILICON LABORATOR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SILICON LABORATOR unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lyxor 1 and SILICON LABORATOR Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lyxor 1 and SILICON LABORATOR

The main advantage of trading using opposite Lyxor 1 and SILICON LABORATOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, SILICON LABORATOR 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 SILICON LABORATOR will offset losses from the drop in SILICON LABORATOR's long position.
The idea behind Lyxor 1 and SILICON LABORATOR 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.
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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites