Correlation Between Lyxor 10Y and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both Lyxor 10Y and Franklin FTSE 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 Franklin FTSE 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 Franklin FTSE Brazil, you can compare the effects of market volatilities on Lyxor 10Y and Franklin FTSE 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 Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 10Y and Franklin FTSE.
Diversification Opportunities for Lyxor 10Y and Franklin FTSE
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lyxor and Franklin is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 10Y Inflation and Franklin FTSE Brazil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Brazil 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 Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Brazil has no effect on the direction of Lyxor 10Y i.e., Lyxor 10Y and Franklin FTSE go up and down completely randomly.
Pair Corralation between Lyxor 10Y and Franklin FTSE
Assuming the 90 days trading horizon Lyxor 10Y Inflation is expected to generate 0.18 times more return on investment than Franklin FTSE. However, Lyxor 10Y Inflation is 5.7 times less risky than Franklin FTSE. It trades about 0.14 of its potential returns per unit of risk. Franklin FTSE Brazil is currently generating about -0.15 per unit of risk. If you would invest 12,779 in Lyxor 10Y Inflation on September 3, 2024 and sell it today you would earn a total of 261.00 from holding Lyxor 10Y Inflation or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 10Y Inflation vs. Franklin FTSE Brazil
Performance |
| Timeline |
| Lyxor 10Y Inflation |
| Franklin FTSE Brazil |
Lyxor 10Y and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 10Y and Franklin FTSE
The main advantage of trading using opposite Lyxor 10Y and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 10Y position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| Lyxor 10Y vs. Lyxor Smart Overnight | Lyxor 10Y vs. Lyxor UCITS EuroMTS | Lyxor 10Y vs. Lyxor Core UK | Lyxor 10Y vs. Lyxor Core Global |
| Franklin FTSE vs. Franklin LibertyQ Global | Franklin FTSE vs. Franklin Libertyshares ICAV | Franklin FTSE vs. Franklin FTSE Asia | Franklin FTSE vs. Franklin LibertyQ AC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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