Correlation Between Lyxor 10Y and PIMCO Emerging
Can any of the company-specific risk be diversified away by investing in both Lyxor 10Y and PIMCO Emerging 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 PIMCO Emerging 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 PIMCO Emerging Markets, you can compare the effects of market volatilities on Lyxor 10Y and PIMCO Emerging 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 PIMCO Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 10Y and PIMCO Emerging.
Diversification Opportunities for Lyxor 10Y and PIMCO Emerging
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyxor and PIMCO is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 10Y Inflation and PIMCO Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Emerging Markets 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 PIMCO Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Emerging Markets has no effect on the direction of Lyxor 10Y i.e., Lyxor 10Y and PIMCO Emerging go up and down completely randomly.
Pair Corralation between Lyxor 10Y and PIMCO Emerging
Assuming the 90 days trading horizon Lyxor 10Y Inflation is expected to generate 0.56 times more return on investment than PIMCO Emerging. However, Lyxor 10Y Inflation is 1.78 times less risky than PIMCO Emerging. It trades about 0.09 of its potential returns per unit of risk. PIMCO Emerging Markets is currently generating about -0.1 per unit of risk. If you would invest 13,043 in Lyxor 10Y Inflation on September 5, 2024 and sell it today you would earn a total of 73.00 from holding Lyxor 10Y Inflation or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 10Y Inflation vs. PIMCO Emerging Markets
Performance |
| Timeline |
| Lyxor 10Y Inflation |
| PIMCO Emerging Markets |
Lyxor 10Y and PIMCO Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 10Y and PIMCO Emerging
The main advantage of trading using opposite Lyxor 10Y and PIMCO Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 10Y position performs unexpectedly, PIMCO Emerging 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 PIMCO Emerging will offset losses from the drop in PIMCO Emerging's long position.| Lyxor 10Y vs. Leverage Shares 3x | Lyxor 10Y vs. Leverage Shares 3x | Lyxor 10Y vs. GraniteShares 3x Short | Lyxor 10Y vs. WisdomTree Natural Gas |
| PIMCO Emerging vs. Leverage Shares 3x | PIMCO Emerging vs. WisdomTree Natural Gas | PIMCO Emerging vs. SP 500 VIX | PIMCO Emerging 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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