Correlation Between Lyxor UCITS and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Amundi Index 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 Amundi Index 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 Amundi Index Solutions, you can compare the effects of market volatilities on Lyxor UCITS and Amundi Index 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 Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Amundi Index.
Diversification Opportunities for Lyxor UCITS and Amundi Index
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lyxor and Amundi is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions 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 Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Amundi Index go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Amundi Index
Assuming the 90 days trading horizon Lyxor UCITS Japan is expected to generate 1.34 times more return on investment than Amundi Index. However, Lyxor UCITS is 1.34 times more volatile than Amundi Index Solutions. It trades about 0.06 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.07 per unit of risk. If you would invest 12,596 in Lyxor UCITS Japan on September 16, 2024 and sell it today you would earn a total of 3,952 from holding Lyxor UCITS Japan or generate 31.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Japan vs. Amundi Index Solutions
Performance |
| Timeline |
| Lyxor UCITS Japan |
| Amundi Index Solutions |
Lyxor UCITS and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Amundi Index
The main advantage of trading using opposite Lyxor UCITS and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Amundi Index 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 Amundi Index will offset losses from the drop in Amundi Index's long position.| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Amundi CAC 40 | Lyxor UCITS vs. Gold Bullion Securities |
| Amundi Index vs. Lyxor UCITS Japan | Amundi Index vs. Lyxor UCITS Japan | Amundi Index vs. Lyxor UCITS Stoxx | Amundi Index vs. Amundi CAC 40 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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