Correlation Between Lyxor 1 and PIAGGIO C
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and PIAGGIO C 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 PIAGGIO C into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and PIAGGIO C, you can compare the effects of market volatilities on Lyxor 1 and PIAGGIO C 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 PIAGGIO C. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and PIAGGIO C.
Diversification Opportunities for Lyxor 1 and PIAGGIO C
Very good diversification
The 3 months correlation between Lyxor and PIAGGIO is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and PIAGGIO C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIAGGIO C 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 PIAGGIO C. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIAGGIO C has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and PIAGGIO C go up and down completely randomly.
Pair Corralation between Lyxor 1 and PIAGGIO C
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.45 times more return on investment than PIAGGIO C. However, Lyxor 1 is 2.24 times less risky than PIAGGIO C. It trades about 0.14 of its potential returns per unit of risk. PIAGGIO C is currently generating about -0.12 per unit of risk. If you would invest 2,400 in Lyxor 1 on September 13, 2024 and sell it today you would earn a total of 186.00 from holding Lyxor 1 or generate 7.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 1 vs. PIAGGIO C
Performance |
| Timeline |
| Lyxor 1 |
| PIAGGIO C |
Lyxor 1 and PIAGGIO C Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and PIAGGIO C
The main advantage of trading using opposite Lyxor 1 and PIAGGIO C positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, PIAGGIO C 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 PIAGGIO C will offset losses from the drop in PIAGGIO C'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 |
| PIAGGIO C vs. WILLIS LEASE FIN | PIAGGIO C vs. Summit Materials | PIAGGIO C vs. BW OFFSHORE LTD | PIAGGIO C vs. SOLSTAD OFFSHORE NK |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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