Correlation Between Lyxor 10Y and JPM BetaBuilders
Can any of the company-specific risk be diversified away by investing in both Lyxor 10Y and JPM BetaBuilders 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 JPM BetaBuilders 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 JPM BetaBuilders China, you can compare the effects of market volatilities on Lyxor 10Y and JPM BetaBuilders 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 JPM BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 10Y and JPM BetaBuilders.
Diversification Opportunities for Lyxor 10Y and JPM BetaBuilders
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyxor and JPM is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 10Y Inflation and JPM BetaBuilders China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM BetaBuilders China 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 JPM BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM BetaBuilders China has no effect on the direction of Lyxor 10Y i.e., Lyxor 10Y and JPM BetaBuilders go up and down completely randomly.
Pair Corralation between Lyxor 10Y and JPM BetaBuilders
Assuming the 90 days trading horizon Lyxor 10Y Inflation is expected to generate 0.94 times more return on investment than JPM BetaBuilders. However, Lyxor 10Y Inflation is 1.06 times less risky than JPM BetaBuilders. It trades about -0.06 of its potential returns per unit of risk. JPM BetaBuilders China is currently generating about -0.16 per unit of risk. If you would invest 13,088 in Lyxor 10Y Inflation on September 2, 2024 and sell it today you would lose (48.00) from holding Lyxor 10Y Inflation or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor 10Y Inflation vs. JPM BetaBuilders China
Performance |
| Timeline |
| Lyxor 10Y Inflation |
| JPM BetaBuilders China |
Lyxor 10Y and JPM BetaBuilders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 10Y and JPM BetaBuilders
The main advantage of trading using opposite Lyxor 10Y and JPM BetaBuilders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 10Y position performs unexpectedly, JPM BetaBuilders 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 JPM BetaBuilders will offset losses from the drop in JPM BetaBuilders' long position.| Lyxor 10Y vs. WisdomTree Natural Gas | Lyxor 10Y vs. WisdomTree Natural Gas | Lyxor 10Y vs. Leverage Shares 2x | Lyxor 10Y vs. WisdomTree Silver 3x |
| JPM BetaBuilders vs. Leverage Shares 3x | JPM BetaBuilders vs. WisdomTree Natural Gas | JPM BetaBuilders vs. GraniteShares 3x Short | JPM BetaBuilders 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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