Correlation Between Lyxor 1 and SAF Holland
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and SAF Holland 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 SAF Holland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and SAF Holland SA, you can compare the effects of market volatilities on Lyxor 1 and SAF Holland 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 SAF Holland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and SAF Holland.
Diversification Opportunities for Lyxor 1 and SAF Holland
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and SAF is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and SAF Holland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAF Holland SA 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 SAF Holland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAF Holland SA has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and SAF Holland go up and down completely randomly.
Pair Corralation between Lyxor 1 and SAF Holland
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.25 times more return on investment than SAF Holland. However, Lyxor 1 is 3.99 times less risky than SAF Holland. It trades about 0.25 of its potential returns per unit of risk. SAF Holland SA is currently generating about 0.01 per unit of risk. If you would invest 2,481 in Lyxor 1 on September 12, 2024 and sell it today you would earn a total of 90.00 from holding Lyxor 1 or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lyxor 1 vs. SAF Holland SA
Performance |
| Timeline |
| Lyxor 1 |
| SAF Holland SA |
Lyxor 1 and SAF Holland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and SAF Holland
The main advantage of trading using opposite Lyxor 1 and SAF Holland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, SAF Holland 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 SAF Holland will offset losses from the drop in SAF Holland'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 |
| SAF Holland vs. SALESFORCE INC CDR | SAF Holland vs. Carsales | SAF Holland vs. Dairy Farm International | SAF Holland vs. CANON MARKETING JP |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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