Correlation Between Lyxor UCITS and BNPP EHY
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and BNPP EHY 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 BNPP EHY 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 BNPP EHY SRI, you can compare the effects of market volatilities on Lyxor UCITS and BNPP EHY 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 BNPP EHY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and BNPP EHY.
Diversification Opportunities for Lyxor UCITS and BNPP EHY
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and BNPP is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and BNPP EHY SRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNPP EHY SRI 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 BNPP EHY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNPP EHY SRI has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and BNPP EHY go up and down completely randomly.
Pair Corralation between Lyxor UCITS and BNPP EHY
Assuming the 90 days trading horizon Lyxor UCITS Japan is expected to generate 6.44 times more return on investment than BNPP EHY. However, Lyxor UCITS is 6.44 times more volatile than BNPP EHY SRI. It trades about 0.27 of its potential returns per unit of risk. BNPP EHY SRI is currently generating about 0.38 per unit of risk. If you would invest 16,095 in Lyxor UCITS Japan on September 13, 2024 and sell it today you would earn a total of 799.00 from holding Lyxor UCITS Japan or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Japan vs. BNPP EHY SRI
Performance |
| Timeline |
| Lyxor UCITS Japan |
| BNPP EHY SRI |
Lyxor UCITS and BNPP EHY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and BNPP EHY
The main advantage of trading using opposite Lyxor UCITS and BNPP EHY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, BNPP EHY 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 BNPP EHY will offset losses from the drop in BNPP EHY'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 |
| BNPP EHY vs. Lyxor UCITS Japan | BNPP EHY vs. Lyxor UCITS Japan | BNPP EHY vs. Lyxor UCITS Stoxx | BNPP EHY 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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