Correlation Between Lyxor 1 and NEO PERFORMMAT
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and NEO PERFORMMAT 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 NEO PERFORMMAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and NEO PERFORMMAT, you can compare the effects of market volatilities on Lyxor 1 and NEO PERFORMMAT 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 NEO PERFORMMAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and NEO PERFORMMAT.
Diversification Opportunities for Lyxor 1 and NEO PERFORMMAT
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and NEO is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and NEO PERFORMMAT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEO PERFORMMAT 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 NEO PERFORMMAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEO PERFORMMAT has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and NEO PERFORMMAT go up and down completely randomly.
Pair Corralation between Lyxor 1 and NEO PERFORMMAT
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.15 times more return on investment than NEO PERFORMMAT. However, Lyxor 1 is 6.57 times less risky than NEO PERFORMMAT. It trades about 0.44 of its potential returns per unit of risk. NEO PERFORMMAT is currently generating about 0.06 per unit of risk. If you would invest 2,426 in Lyxor 1 on September 21, 2024 and sell it today you would earn a total of 124.00 from holding Lyxor 1 or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. NEO PERFORMMAT
Performance |
| Timeline |
| Lyxor 1 |
| NEO PERFORMMAT |
Lyxor 1 and NEO PERFORMMAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and NEO PERFORMMAT
The main advantage of trading using opposite Lyxor 1 and NEO PERFORMMAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, NEO PERFORMMAT 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 NEO PERFORMMAT will offset losses from the drop in NEO PERFORMMAT'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 |
| NEO PERFORMMAT vs. Albemarle | NEO PERFORMMAT vs. Superior Plus Corp | NEO PERFORMMAT vs. SIVERS SEMICONDUCTORS AB | NEO PERFORMMAT vs. Norsk Hydro ASA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |