Correlation Between Lyxor Japan and LG Battery
Can any of the company-specific risk be diversified away by investing in both Lyxor Japan and LG Battery 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 Japan and LG Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor Japan UCITS and LG Battery Value Chain, you can compare the effects of market volatilities on Lyxor Japan and LG Battery 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 Japan with a short position of LG Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Japan and LG Battery.
Diversification Opportunities for Lyxor Japan and LG Battery
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and BATT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Japan UCITS and LG Battery Value Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Battery Value and Lyxor Japan 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 Japan UCITS are associated (or correlated) with LG Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Battery Value has no effect on the direction of Lyxor Japan i.e., Lyxor Japan and LG Battery go up and down completely randomly.
Pair Corralation between Lyxor Japan and LG Battery
Assuming the 90 days trading horizon Lyxor Japan UCITS is expected to generate 0.92 times more return on investment than LG Battery. However, Lyxor Japan UCITS is 1.09 times less risky than LG Battery. It trades about 0.01 of its potential returns per unit of risk. LG Battery Value Chain is currently generating about 0.0 per unit of risk. If you would invest 2,574,500 in Lyxor Japan UCITS on August 31, 2024 and sell it today you would earn a total of 10,000 from holding Lyxor Japan UCITS or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Lyxor Japan UCITS vs. LG Battery Value Chain
Performance |
| Timeline |
| Lyxor Japan UCITS |
| LG Battery Value |
Lyxor Japan and LG Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Japan and LG Battery
The main advantage of trading using opposite Lyxor Japan and LG Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Japan position performs unexpectedly, LG Battery 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 LG Battery will offset losses from the drop in LG Battery's long position.| Lyxor Japan vs. UBSFund Solutions MSCI | Lyxor Japan vs. iShares Core SP | Lyxor Japan vs. iShares Core MSCI | Lyxor Japan vs. Lyxor UCITS Stoxx |
| LG Battery vs. UBSFund Solutions MSCI | LG Battery vs. iShares Core SP | LG Battery vs. iShares Core MSCI | LG Battery vs. Lyxor UCITS Stoxx |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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