Correlation Between Lyxor UCITS and Lyxor Net
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Lyxor Net 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 Lyxor Net 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 Lyxor Net Zero, you can compare the effects of market volatilities on Lyxor UCITS and Lyxor Net 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 Lyxor Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Lyxor Net.
Diversification Opportunities for Lyxor UCITS and Lyxor Net
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and Lyxor is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and Lyxor Net Zero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Net Zero 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 Lyxor Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Net Zero has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Lyxor Net go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Lyxor Net
Assuming the 90 days trading horizon Lyxor UCITS is expected to generate 1.05 times less return on investment than Lyxor Net. In addition to that, Lyxor UCITS is 1.39 times more volatile than Lyxor Net Zero. It trades about 0.07 of its total potential returns per unit of risk. Lyxor Net Zero is currently generating about 0.1 per unit of volatility. If you would invest 1,996 in Lyxor Net Zero on August 30, 2024 and sell it today you would earn a total of 1,045 from holding Lyxor Net Zero or generate 52.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Lyxor UCITS Japan vs. Lyxor Net Zero
Performance |
| Timeline |
| Lyxor UCITS Japan |
| Lyxor Net Zero |
Lyxor UCITS and Lyxor Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Lyxor Net
The main advantage of trading using opposite Lyxor UCITS and Lyxor Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Lyxor Net 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 Net will offset losses from the drop in Lyxor Net'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 |
| Lyxor Net vs. Lyxor SP 500 | Lyxor Net vs. Lyxor UCITS Daily | Lyxor Net vs. Lyxor UCITS MSCI | Lyxor Net vs. Lyxor Treasury 10Y |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |