Correlation Between Lyxor Ibex and Lyxor Ibex
Can any of the company-specific risk be diversified away by investing in both Lyxor Ibex and Lyxor Ibex 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 Ibex and Lyxor Ibex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor Ibex 35 and Lyxor Ibex 35, you can compare the effects of market volatilities on Lyxor Ibex and Lyxor Ibex 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 Ibex with a short position of Lyxor Ibex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Ibex and Lyxor Ibex.
Diversification Opportunities for Lyxor Ibex and Lyxor Ibex
-0.99 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lyxor and Lyxor is -0.99. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Ibex 35 and Lyxor Ibex 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Ibex 35 and Lyxor Ibex 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 Ibex 35 are associated (or correlated) with Lyxor Ibex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Ibex 35 has no effect on the direction of Lyxor Ibex i.e., Lyxor Ibex and Lyxor Ibex go up and down completely randomly.
Pair Corralation between Lyxor Ibex and Lyxor Ibex
Assuming the 90 days trading horizon Lyxor Ibex 35 is expected to under-perform the Lyxor Ibex. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor Ibex 35 is 1.05 times less risky than Lyxor Ibex. The etf trades about -0.05 of its potential returns per unit of risk. The Lyxor Ibex 35 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 89.00 in Lyxor Ibex 35 on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Lyxor Ibex 35 or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor Ibex 35 vs. Lyxor Ibex 35
Performance |
| Timeline |
| Lyxor Ibex 35 |
| Lyxor Ibex 35 |
Lyxor Ibex and Lyxor Ibex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Ibex and Lyxor Ibex
The main advantage of trading using opposite Lyxor Ibex and Lyxor Ibex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Ibex position performs unexpectedly, Lyxor Ibex 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 Ibex will offset losses from the drop in Lyxor Ibex's long position.The idea behind Lyxor Ibex 35 and Lyxor Ibex 35 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.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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