Correlation Between Lyxor Ibex and Accion IBEX
Can any of the company-specific risk be diversified away by investing in both Lyxor Ibex and Accion 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 Accion 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 Accion IBEX 35, you can compare the effects of market volatilities on Lyxor Ibex and Accion 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 Accion IBEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Ibex and Accion IBEX.
Diversification Opportunities for Lyxor Ibex and Accion IBEX
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lyxor and Accion is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Ibex 35 and Accion IBEX 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accion 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 Accion IBEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accion IBEX 35 has no effect on the direction of Lyxor Ibex i.e., Lyxor Ibex and Accion IBEX go up and down completely randomly.
Pair Corralation between Lyxor Ibex and Accion IBEX
Assuming the 90 days trading horizon Lyxor Ibex 35 is expected to generate 1.88 times more return on investment than Accion IBEX. However, Lyxor Ibex is 1.88 times more volatile than Accion IBEX 35. It trades about 0.03 of its potential returns per unit of risk. Accion IBEX 35 is currently generating about 0.04 per unit of risk. If you would invest 2,681 in Lyxor Ibex 35 on September 3, 2024 and sell it today you would earn a total of 153.00 from holding Lyxor Ibex 35 or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.22% |
| Values | Daily Returns |
Lyxor Ibex 35 vs. Accion IBEX 35
Performance |
| Timeline |
| Lyxor Ibex 35 |
| Accion IBEX 35 |
Lyxor Ibex and Accion IBEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Ibex and Accion IBEX
The main advantage of trading using opposite Lyxor Ibex and Accion IBEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Ibex position performs unexpectedly, Accion 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 Accion IBEX will offset losses from the drop in Accion IBEX's long position.| Lyxor Ibex vs. Lyxor UCITS Ibex35 | Lyxor Ibex vs. Lyxor Ibex 35 | Lyxor Ibex vs. Metrovacesa SA | Lyxor Ibex vs. Endurance Motive SA |
| Accion IBEX vs. Lyxor UCITS Ibex35 | Accion IBEX vs. Lyxor Ibex 35 | Accion IBEX vs. Lyxor Ibex 35 | Accion IBEX vs. Metrovacesa SA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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