Correlation Between Lyxor UCITS and Multi Units
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Multi Units 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 Multi Units 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 Multi Units Luxembourg, you can compare the effects of market volatilities on Lyxor UCITS and Multi Units 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 Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Multi Units.
Diversification Opportunities for Lyxor UCITS and Multi Units
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and Multi is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and Multi Units Luxembourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units Luxembourg 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 Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units Luxembourg has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Multi Units go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Multi Units
Assuming the 90 days trading horizon Lyxor UCITS is expected to generate 5.97 times less return on investment than Multi Units. But when comparing it to its historical volatility, Lyxor UCITS Japan is 1.48 times less risky than Multi Units. It trades about 0.04 of its potential returns per unit of risk. Multi Units Luxembourg is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 82,640 in Multi Units Luxembourg on August 29, 2024 and sell it today you would earn a total of 3,689 from holding Multi Units Luxembourg or generate 4.46% 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. Multi Units Luxembourg
Performance |
| Timeline |
| Lyxor UCITS Japan |
| Multi Units Luxembourg |
Lyxor UCITS and Multi Units Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Multi Units
The main advantage of trading using opposite Lyxor UCITS and Multi Units positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Multi Units 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 Multi Units will offset losses from the drop in Multi Units' 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 |
| Multi Units vs. Amundi Index Solutions | Multi Units vs. Manitou BF SA | Multi Units vs. Ossiam Minimum Variance | Multi Units vs. Ekinops SA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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