Correlation Between Encavis AG and Lyxor 1
Can any of the company-specific risk be diversified away by investing in both Encavis AG and Lyxor 1 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 Encavis AG and Lyxor 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encavis AG and Lyxor 1 , you can compare the effects of market volatilities on Encavis AG and Lyxor 1 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 Encavis AG with a short position of Lyxor 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encavis AG and Lyxor 1.
Diversification Opportunities for Encavis AG and Lyxor 1
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Encavis and Lyxor is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Encavis AG and Lyxor 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor 1 and Encavis AG 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 Encavis AG are associated (or correlated) with Lyxor 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor 1 has no effect on the direction of Encavis AG i.e., Encavis AG and Lyxor 1 go up and down completely randomly.
Pair Corralation between Encavis AG and Lyxor 1
Assuming the 90 days trading horizon Encavis AG is expected to under-perform the Lyxor 1. But the stock apears to be less risky and, when comparing its historical volatility, Encavis AG is 1.53 times less risky than Lyxor 1. The stock trades about -0.01 of its potential returns per unit of risk. The Lyxor 1 is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,413 in Lyxor 1 on September 4, 2024 and sell it today you would earn a total of 86.00 from holding Lyxor 1 or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Encavis AG vs. Lyxor 1
Performance |
| Timeline |
| Encavis AG |
| Lyxor 1 |
Encavis AG and Lyxor 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encavis AG and Lyxor 1
The main advantage of trading using opposite Encavis AG and Lyxor 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encavis AG position performs unexpectedly, Lyxor 1 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 1 will offset losses from the drop in Lyxor 1's long position.| Encavis AG vs. SCOTT TECHNOLOGY | Encavis AG vs. Axway Software SA | Encavis AG vs. Casio Computer CoLtd | Encavis AG vs. AECOM TECHNOLOGY |
| Lyxor 1 vs. Lyxor Fed Funds | Lyxor 1 vs. Lyxor BofAML USD | Lyxor 1 vs. Lyxor 1 TecDAX | Lyxor 1 vs. Lyxor UCITS EuroMTS |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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