Correlation Between Lyxor 1 and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Peninsula Energy 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 Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Peninsula Energy Limited, you can compare the effects of market volatilities on Lyxor 1 and Peninsula Energy 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 Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Peninsula Energy.
Diversification Opportunities for Lyxor 1 and Peninsula Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and Peninsula is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Peninsula Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy 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 Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Peninsula Energy go up and down completely randomly.
Pair Corralation between Lyxor 1 and Peninsula Energy
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.11 times more return on investment than Peninsula Energy. However, Lyxor 1 is 9.51 times less risky than Peninsula Energy. It trades about 0.47 of its potential returns per unit of risk. Peninsula Energy Limited is currently generating about 0.0 per unit of risk. If you would invest 2,533 in Lyxor 1 on November 7, 2024 and sell it today you would earn a total of 177.00 from holding Lyxor 1 or generate 6.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.96% |
| Values | Daily Returns |
Lyxor 1 vs. Peninsula Energy Limited
Performance |
| Timeline |
| Lyxor 1 |
| Peninsula Energy |
Lyxor 1 and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and Peninsula Energy
The main advantage of trading using opposite Lyxor 1 and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Peninsula Energy 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 Peninsula Energy will offset losses from the drop in Peninsula Energy'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 |
| Peninsula Energy vs. BHP Group Limited | Peninsula Energy vs. Rio Tinto Group | Peninsula Energy vs. Vale SA | Peninsula Energy vs. Vale SA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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