Correlation Between Lyxor UCITS and Gold Bullion
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Gold Bullion 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 Gold Bullion 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 Gold Bullion Securities, you can compare the effects of market volatilities on Lyxor UCITS and Gold Bullion 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 Gold Bullion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Gold Bullion.
Diversification Opportunities for Lyxor UCITS and Gold Bullion
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lyxor and Gold is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and Gold Bullion Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion Securities 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 Gold Bullion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bullion Securities has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Gold Bullion go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Gold Bullion
Assuming the 90 days trading horizon Lyxor UCITS Japan is expected to generate 0.77 times more return on investment than Gold Bullion. However, Lyxor UCITS Japan is 1.29 times less risky than Gold Bullion. It trades about 0.04 of its potential returns per unit of risk. Gold Bullion Securities is currently generating about -0.03 per unit of risk. If you would invest 21,520 in Lyxor UCITS Japan on August 29, 2024 and sell it today you would earn a total of 145.00 from holding Lyxor UCITS Japan or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Japan vs. Gold Bullion Securities
Performance |
| Timeline |
| Lyxor UCITS Japan |
| Gold Bullion Securities |
Lyxor UCITS and Gold Bullion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Gold Bullion
The main advantage of trading using opposite Lyxor UCITS and Gold Bullion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Gold Bullion 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 Gold Bullion will offset losses from the drop in Gold Bullion's long position.| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Amundi Index Solutions | Lyxor UCITS vs. Amundi Index Solutions | Lyxor UCITS vs. Amundi Index Solutions |
| Gold Bullion vs. Amundi Index Solutions | Gold Bullion vs. Multi Units Luxembourg | Gold Bullion vs. iShares Digital Entertainment | Gold Bullion vs. Amundi Index Solutions |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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