Correlation Between Lyxor 10Y and KraneShares ICBCCS
Can any of the company-specific risk be diversified away by investing in both Lyxor 10Y and KraneShares ICBCCS 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 KraneShares ICBCCS 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 KraneShares ICBCCS SP, you can compare the effects of market volatilities on Lyxor 10Y and KraneShares ICBCCS 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 KraneShares ICBCCS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 10Y and KraneShares ICBCCS.
Diversification Opportunities for Lyxor 10Y and KraneShares ICBCCS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lyxor and KraneShares is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 10Y Inflation and KraneShares ICBCCS SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares ICBCCS 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 KraneShares ICBCCS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares ICBCCS has no effect on the direction of Lyxor 10Y i.e., Lyxor 10Y and KraneShares ICBCCS go up and down completely randomly.
Pair Corralation between Lyxor 10Y and KraneShares ICBCCS
Assuming the 90 days trading horizon Lyxor 10Y is expected to generate 4.19 times less return on investment than KraneShares ICBCCS. But when comparing it to its historical volatility, Lyxor 10Y Inflation is 8.27 times less risky than KraneShares ICBCCS. It trades about 0.11 of its potential returns per unit of risk. KraneShares ICBCCS SP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 79,560 in KraneShares ICBCCS SP on August 27, 2024 and sell it today you would earn a total of 12,890 from holding KraneShares ICBCCS SP or generate 16.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 10Y Inflation vs. KraneShares ICBCCS SP
Performance |
| Timeline |
| Lyxor 10Y Inflation |
| KraneShares ICBCCS |
Lyxor 10Y and KraneShares ICBCCS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 10Y and KraneShares ICBCCS
The main advantage of trading using opposite Lyxor 10Y and KraneShares ICBCCS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 10Y position performs unexpectedly, KraneShares ICBCCS 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 KraneShares ICBCCS will offset losses from the drop in KraneShares ICBCCS'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 |
| KraneShares ICBCCS vs. Leverage Shares 3x | KraneShares ICBCCS vs. WisdomTree SP 500 | KraneShares ICBCCS vs. WisdomTree Silver 3x | KraneShares ICBCCS vs. Leverage Shares 3x |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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