Correlation Between Lyxor 1 and SPX TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and SPX TECHNOLOGIES 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 SPX TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and SPX TECHNOLOGIES DL, you can compare the effects of market volatilities on Lyxor 1 and SPX TECHNOLOGIES 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 SPX TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and SPX TECHNOLOGIES.
Diversification Opportunities for Lyxor 1 and SPX TECHNOLOGIES
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and SPX is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and SPX TECHNOLOGIES DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPX TECHNOLOGIES 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 SPX TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPX TECHNOLOGIES has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and SPX TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Lyxor 1 and SPX TECHNOLOGIES
Assuming the 90 days trading horizon Lyxor 1 is expected to under-perform the SPX TECHNOLOGIES. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor 1 is 3.53 times less risky than SPX TECHNOLOGIES. The etf trades about -0.07 of its potential returns per unit of risk. The SPX TECHNOLOGIES DL is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 14,600 in SPX TECHNOLOGIES DL on August 28, 2024 and sell it today you would earn a total of 2,300 from holding SPX TECHNOLOGIES DL or generate 15.75% 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. SPX TECHNOLOGIES DL
Performance |
| Timeline |
| Lyxor 1 |
| SPX TECHNOLOGIES |
Lyxor 1 and SPX TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 1 and SPX TECHNOLOGIES
The main advantage of trading using opposite Lyxor 1 and SPX TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, SPX TECHNOLOGIES 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 SPX TECHNOLOGIES will offset losses from the drop in SPX TECHNOLOGIES's long position.| Lyxor 1 vs. Lyxor Fed Funds | Lyxor 1 vs. Lyxor BofAML USD | Lyxor 1 vs. Lyxor 1 TecDAX | Lyxor 1 vs. Lyxor UCITS EuroMTS |
| SPX TECHNOLOGIES vs. Mitsui Chemicals | SPX TECHNOLOGIES vs. MGIC INVESTMENT | SPX TECHNOLOGIES vs. SEKISUI CHEMICAL | SPX TECHNOLOGIES vs. Siamgas And Petrochemicals |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |