Correlation Between Lyxor 10Y and IShares VII
Can any of the company-specific risk be diversified away by investing in both Lyxor 10Y and IShares VII 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 10Y and IShares VII into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 10Y Inflation and iShares VII Public, you can compare the effects of market volatilities on Lyxor 10Y and IShares VII 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 10Y with a short position of IShares VII. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 10Y and IShares VII.
Diversification Opportunities for Lyxor 10Y and IShares VII
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and IShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 10Y Inflation and iShares VII Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares VII Public and Lyxor 10Y 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 10Y Inflation are associated (or correlated) with IShares VII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares VII Public has no effect on the direction of Lyxor 10Y i.e., Lyxor 10Y and IShares VII go up and down completely randomly.
Pair Corralation between Lyxor 10Y and IShares VII
Assuming the 90 days trading horizon Lyxor 10Y Inflation is expected to generate 0.28 times more return on investment than IShares VII. However, Lyxor 10Y Inflation is 3.52 times less risky than IShares VII. It trades about 0.19 of its potential returns per unit of risk. iShares VII Public is currently generating about -0.12 per unit of risk. If you would invest 13,014 in Lyxor 10Y Inflation on August 26, 2024 and sell it today you would earn a total of 126.00 from holding Lyxor 10Y Inflation or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 10Y Inflation vs. iShares VII Public
Performance |
| Timeline |
| Lyxor 10Y Inflation |
| iShares VII Public |
Lyxor 10Y and IShares VII Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 10Y and IShares VII
The main advantage of trading using opposite Lyxor 10Y and IShares VII positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 10Y position performs unexpectedly, IShares VII 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 IShares VII will offset losses from the drop in IShares VII's long position.| Lyxor 10Y vs. Leverage Shares 3x | Lyxor 10Y vs. Leverage Shares 2x | Lyxor 10Y vs. Leverage Shares 3x | Lyxor 10Y vs. SANTANDER UK 10 |
| IShares VII vs. iShares MSCI Japan | IShares VII vs. iShares JP Morgan | IShares VII vs. iShares MSCI Europe | IShares VII vs. iShares Nasdaq Biotechnology |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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