Correlation Between Lyxor UCITS and IShares Core
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and IShares Core 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 IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS ETF and iShares Core DAX, you can compare the effects of market volatilities on Lyxor UCITS and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and IShares Core.
Diversification Opportunities for Lyxor UCITS and IShares Core
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and IShares is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS ETF and iShares Core DAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core DAX 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 ETF are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core DAX has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and IShares Core go up and down completely randomly.
Pair Corralation between Lyxor UCITS and IShares Core
Assuming the 90 days trading horizon Lyxor UCITS ETF is expected to generate 1.38 times more return on investment than IShares Core. However, Lyxor UCITS is 1.38 times more volatile than iShares Core DAX. It trades about 0.27 of its potential returns per unit of risk. iShares Core DAX is currently generating about -0.05 per unit of risk. If you would invest 39,770 in Lyxor UCITS ETF on August 27, 2024 and sell it today you would earn a total of 3,215 from holding Lyxor UCITS ETF or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS ETF vs. iShares Core DAX
Performance |
| Timeline |
| Lyxor UCITS ETF |
| iShares Core DAX |
Lyxor UCITS and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and IShares Core
The main advantage of trading using opposite Lyxor UCITS and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| Lyxor UCITS vs. iShares Core DAX | Lyxor UCITS vs. iShares ATX UCITS | Lyxor UCITS vs. RATH Aktiengesellschaft | Lyxor UCITS vs. AT S Austria |
| IShares Core vs. iShares ATX UCITS | IShares Core vs. RATH Aktiengesellschaft | IShares Core vs. AT S Austria | IShares Core vs. BAWAG Group AG |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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