Correlation Between Lyxor UCITS and Granite 3x
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Granite 3x 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 UCITS and Granite 3x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS Japan and Granite 3x LVMH, you can compare the effects of market volatilities on Lyxor UCITS and Granite 3x 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 UCITS with a short position of Granite 3x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Granite 3x.
Diversification Opportunities for Lyxor UCITS and Granite 3x
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lyxor and Granite is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and Granite 3x LVMH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite 3x LVMH and Lyxor UCITS 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 UCITS Japan are associated (or correlated) with Granite 3x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite 3x LVMH has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Granite 3x go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Granite 3x
Assuming the 90 days trading horizon Lyxor UCITS Japan is expected to generate 0.13 times more return on investment than Granite 3x. However, Lyxor UCITS Japan is 7.44 times less risky than Granite 3x. It trades about 0.25 of its potential returns per unit of risk. Granite 3x LVMH is currently generating about -0.15 per unit of risk. If you would invest 15,563 in Lyxor UCITS Japan on August 24, 2024 and sell it today you would earn a total of 682.00 from holding Lyxor UCITS Japan or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lyxor UCITS Japan vs. Granite 3x LVMH
Performance |
| Timeline |
| Lyxor UCITS Japan |
| Granite 3x LVMH |
Lyxor UCITS and Granite 3x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Granite 3x
The main advantage of trading using opposite Lyxor UCITS and Granite 3x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Granite 3x 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 Granite 3x will offset losses from the drop in Granite 3x's long position.| Lyxor UCITS vs. Lyxor MSCI China | Lyxor UCITS vs. Multi Units France | Lyxor UCITS vs. Multi Units Luxembourg | Lyxor UCITS vs. Lyxor MSCI Brazil |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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