Correlation Between Lyxor 10Y and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Lyxor 10Y and IShares MSCI 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 MSCI 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 MSCI USA, you can compare the effects of market volatilities on Lyxor 10Y and IShares MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 10Y and IShares MSCI.
Diversification Opportunities for Lyxor 10Y and IShares MSCI
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lyxor and IShares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 10Y Inflation and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of Lyxor 10Y i.e., Lyxor 10Y and IShares MSCI go up and down completely randomly.
Pair Corralation between Lyxor 10Y and IShares MSCI
Assuming the 90 days trading horizon Lyxor 10Y is expected to generate 4.2 times less return on investment than IShares MSCI. But when comparing it to its historical volatility, Lyxor 10Y Inflation is 3.63 times less risky than IShares MSCI. It trades about 0.1 of its potential returns per unit of risk. iShares MSCI USA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 780.00 in iShares MSCI USA on September 4, 2024 and sell it today you would earn a total of 456.00 from holding iShares MSCI USA or generate 58.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lyxor 10Y Inflation vs. iShares MSCI USA
Performance |
| Timeline |
| Lyxor 10Y Inflation |
| iShares MSCI USA |
Lyxor 10Y and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor 10Y and IShares MSCI
The main advantage of trading using opposite Lyxor 10Y and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 10Y position performs unexpectedly, IShares MSCI 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 MSCI will offset losses from the drop in IShares MSCI'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 |
| IShares MSCI vs. WisdomTree Natural Gas | IShares MSCI vs. WisdomTree NASDAQ 100 | IShares MSCI vs. WisdomTree Silver 3x | IShares MSCI vs. WisdomTree SP 500 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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