Correlation Between Lyxor Japan and Amundi Index
Can any of the company-specific risk be diversified away by investing in both Lyxor Japan and Amundi Index 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 Amundi Index 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 Amundi Index Solutions, you can compare the effects of market volatilities on Lyxor Japan and Amundi Index 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 Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Japan and Amundi Index.
Diversification Opportunities for Lyxor Japan and Amundi Index
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and Amundi is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Japan UCITS and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions 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 Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of Lyxor Japan i.e., Lyxor Japan and Amundi Index go up and down completely randomly.
Pair Corralation between Lyxor Japan and Amundi Index
Assuming the 90 days trading horizon Lyxor Japan UCITS is expected to generate 1.38 times more return on investment than Amundi Index. However, Lyxor Japan is 1.38 times more volatile than Amundi Index Solutions. It trades about -0.02 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about -0.11 per unit of risk. If you would invest 2,742,000 in Lyxor Japan UCITS on October 20, 2024 and sell it today you would lose (164,500) from holding Lyxor Japan UCITS or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor Japan UCITS vs. Amundi Index Solutions
Performance |
| Timeline |
| Lyxor Japan UCITS |
| Amundi Index Solutions |
Lyxor Japan and Amundi Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Japan and Amundi Index
The main advantage of trading using opposite Lyxor Japan and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Japan position performs unexpectedly, Amundi Index 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 Amundi Index will offset losses from the drop in Amundi Index's long position.| Lyxor Japan vs. UBSFund Solutions MSCI | Lyxor Japan vs. Vanguard SP 500 | Lyxor Japan vs. iShares Core SP | Lyxor Japan vs. iShares Core MSCI |
| Amundi Index vs. UBSFund Solutions MSCI | Amundi Index vs. Vanguard SP 500 | Amundi Index vs. iShares Core SP | Amundi Index vs. Lyxor Japan UCITS |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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