Correlation Between Amundi MSCI and LYXOR DAILY

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Can any of the company-specific risk be diversified away by investing in both Amundi MSCI and LYXOR DAILY 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 Amundi MSCI and LYXOR DAILY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi MSCI Europe and LYXOR DAILY SHORTDAX, you can compare the effects of market volatilities on Amundi MSCI and LYXOR DAILY 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 Amundi MSCI with a short position of LYXOR DAILY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi MSCI and LYXOR DAILY.

Diversification Opportunities for Amundi MSCI and LYXOR DAILY

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Amundi and LYXOR is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Amundi MSCI Europe and LYXOR DAILY SHORTDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYXOR DAILY SHORTDAX and Amundi MSCI 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 Amundi MSCI Europe are associated (or correlated) with LYXOR DAILY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYXOR DAILY SHORTDAX has no effect on the direction of Amundi MSCI i.e., Amundi MSCI and LYXOR DAILY go up and down completely randomly.

Pair Corralation between Amundi MSCI and LYXOR DAILY

Assuming the 90 days trading horizon Amundi MSCI Europe is expected to generate 0.46 times more return on investment than LYXOR DAILY. However, Amundi MSCI Europe is 2.19 times less risky than LYXOR DAILY. It trades about 0.29 of its potential returns per unit of risk. LYXOR DAILY SHORTDAX is currently generating about -0.46 per unit of risk. If you would invest  7,749  in Amundi MSCI Europe on September 13, 2024 and sell it today you would earn a total of  291.00  from holding Amundi MSCI Europe or generate 3.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Amundi MSCI Europe  vs.  LYXOR DAILY SHORTDAX

 Performance 
       Timeline  
Amundi MSCI Europe 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Amundi MSCI Europe are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Amundi MSCI is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
LYXOR DAILY SHORTDAX 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LYXOR DAILY SHORTDAX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Etf's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Amundi MSCI and LYXOR DAILY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amundi MSCI and LYXOR DAILY

The main advantage of trading using opposite Amundi MSCI and LYXOR DAILY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi MSCI position performs unexpectedly, LYXOR DAILY 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 LYXOR DAILY will offset losses from the drop in LYXOR DAILY's long position.
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The idea behind Amundi MSCI Europe and LYXOR DAILY SHORTDAX pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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