Correlation Between Multi Units and Lyxor MSCI
Can any of the company-specific risk be diversified away by investing in both Multi Units and Lyxor 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 Multi Units and Lyxor MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Units France and Lyxor MSCI Brazil, you can compare the effects of market volatilities on Multi Units and Lyxor 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 Multi Units with a short position of Lyxor MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and Lyxor MSCI.
Diversification Opportunities for Multi Units and Lyxor MSCI
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multi and Lyxor is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units France and Lyxor MSCI Brazil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor MSCI Brazil and Multi Units 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 Multi Units France are associated (or correlated) with Lyxor MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor MSCI Brazil has no effect on the direction of Multi Units i.e., Multi Units and Lyxor MSCI go up and down completely randomly.
Pair Corralation between Multi Units and Lyxor MSCI
Assuming the 90 days trading horizon Multi Units France is expected to generate 0.65 times more return on investment than Lyxor MSCI. However, Multi Units France is 1.55 times less risky than Lyxor MSCI. It trades about 0.12 of its potential returns per unit of risk. Lyxor MSCI Brazil is currently generating about -0.13 per unit of risk. If you would invest 3,068 in Multi Units France on September 1, 2024 and sell it today you would earn a total of 87.00 from holding Multi Units France or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Multi Units France vs. Lyxor MSCI Brazil
Performance |
| Timeline |
| Multi Units France |
| Lyxor MSCI Brazil |
Multi Units and Lyxor MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Units and Lyxor MSCI
The main advantage of trading using opposite Multi Units and Lyxor MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units position performs unexpectedly, Lyxor 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 Lyxor MSCI will offset losses from the drop in Lyxor MSCI's long position.| Multi Units vs. Lyxor MSCI China | Multi Units vs. Manitou BF SA | Multi Units vs. Ossiam Minimum Variance | Multi Units vs. Granite 3x LVMH |
| Lyxor MSCI vs. Multi Units France | Lyxor MSCI vs. Lyxor MSCI China | Lyxor MSCI vs. Manitou BF SA | Lyxor MSCI vs. Ossiam Minimum Variance |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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