Correlation Between IShares Asia and Lyxor Nasdaq
Can any of the company-specific risk be diversified away by investing in both IShares Asia and Lyxor Nasdaq 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 IShares Asia and Lyxor Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Asia Property and Lyxor Nasdaq 100, you can compare the effects of market volatilities on IShares Asia and Lyxor Nasdaq 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 IShares Asia with a short position of Lyxor Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Asia and Lyxor Nasdaq.
Diversification Opportunities for IShares Asia and Lyxor Nasdaq
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Lyxor is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Asia Property and Lyxor Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Nasdaq 100 and IShares Asia 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 iShares Asia Property are associated (or correlated) with Lyxor Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Nasdaq 100 has no effect on the direction of IShares Asia i.e., IShares Asia and Lyxor Nasdaq go up and down completely randomly.
Pair Corralation between IShares Asia and Lyxor Nasdaq
Assuming the 90 days trading horizon iShares Asia Property is expected to under-perform the Lyxor Nasdaq. But the etf apears to be less risky and, when comparing its historical volatility, iShares Asia Property is 1.38 times less risky than Lyxor Nasdaq. The etf trades about -0.03 of its potential returns per unit of risk. The Lyxor Nasdaq 100 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 11,600 in Lyxor Nasdaq 100 on September 19, 2024 and sell it today you would earn a total of 9,115 from holding Lyxor Nasdaq 100 or generate 78.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.6% |
| Values | Daily Returns |
iShares Asia Property vs. Lyxor Nasdaq 100
Performance |
| Timeline |
| iShares Asia Property |
| Lyxor Nasdaq 100 |
IShares Asia and Lyxor Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Asia and Lyxor Nasdaq
The main advantage of trading using opposite IShares Asia and Lyxor Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Asia position performs unexpectedly, Lyxor Nasdaq 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 Nasdaq will offset losses from the drop in Lyxor Nasdaq's long position.| IShares Asia vs. Baloise Holding AG | IShares Asia vs. 21Shares Polkadot ETP | IShares Asia vs. UBS ETF MSCI | IShares Asia vs. BB Biotech AG |
| Lyxor Nasdaq vs. Lyxor Japan UCITS | Lyxor Nasdaq vs. Lyxor Euro Government | Lyxor Nasdaq vs. Lyxor MSCI China |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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