Correlation Between Gold Bullion and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Gold Bullion and Lyxor UCITS 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 Gold Bullion and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Bullion Securities and Lyxor UCITS iBoxx, you can compare the effects of market volatilities on Gold Bullion and Lyxor UCITS 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 Gold Bullion with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Bullion and Lyxor UCITS.
Diversification Opportunities for Gold Bullion and Lyxor UCITS
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Lyxor is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gold Bullion Securities and Lyxor UCITS iBoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS iBoxx and Gold Bullion 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 Gold Bullion Securities are associated (or correlated) with Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS iBoxx has no effect on the direction of Gold Bullion i.e., Gold Bullion and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Gold Bullion and Lyxor UCITS
Assuming the 90 days trading horizon Gold Bullion Securities is expected to under-perform the Lyxor UCITS. In addition to that, Gold Bullion is 2.36 times more volatile than Lyxor UCITS iBoxx. It trades about -0.03 of its total potential returns per unit of risk. Lyxor UCITS iBoxx is currently generating about 0.36 per unit of volatility. If you would invest 9,332 in Lyxor UCITS iBoxx on August 23, 2024 and sell it today you would earn a total of 279.00 from holding Lyxor UCITS iBoxx or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Bullion Securities vs. Lyxor UCITS iBoxx
Performance |
| Timeline |
| Gold Bullion Securities |
| Lyxor UCITS iBoxx |
Gold Bullion and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Bullion and Lyxor UCITS
The main advantage of trading using opposite Gold Bullion and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Bullion position performs unexpectedly, Lyxor UCITS 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 UCITS will offset losses from the drop in Lyxor UCITS's long position.| Gold Bullion vs. Amundi Index Solutions | Gold Bullion vs. Multi Units Luxembourg | Gold Bullion vs. iShares Digital Entertainment | Gold Bullion vs. Amundi Index Solutions |
| Lyxor UCITS vs. Lyxor SP 500 | Lyxor UCITS vs. Lyxor UCITS Daily | Lyxor UCITS vs. Lyxor UCITS MSCI | Lyxor UCITS vs. Lyxor Treasury 10Y |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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