Correlation Between Lyxor Japan and Invesco Technology
Can any of the company-specific risk be diversified away by investing in both Lyxor Japan and Invesco Technology 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 Invesco Technology 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 Invesco Technology SP, you can compare the effects of market volatilities on Lyxor Japan and Invesco Technology 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 Invesco Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Japan and Invesco Technology.
Diversification Opportunities for Lyxor Japan and Invesco Technology
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lyxor and Invesco is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Japan UCITS and Invesco Technology SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Technology 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 Invesco Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Technology has no effect on the direction of Lyxor Japan i.e., Lyxor Japan and Invesco Technology go up and down completely randomly.
Pair Corralation between Lyxor Japan and Invesco Technology
Assuming the 90 days trading horizon Lyxor Japan UCITS is expected to generate 0.7 times more return on investment than Invesco Technology. However, Lyxor Japan UCITS is 1.44 times less risky than Invesco Technology. It trades about 0.05 of its potential returns per unit of risk. Invesco Technology SP is currently generating about 0.02 per unit of risk. If you would invest 2,590,000 in Lyxor Japan UCITS on August 28, 2024 and sell it today you would earn a total of 24,500 from holding Lyxor Japan UCITS or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor Japan UCITS vs. Invesco Technology SP
Performance |
| Timeline |
| Lyxor Japan UCITS |
| Invesco Technology |
Lyxor Japan and Invesco Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Japan and Invesco Technology
The main advantage of trading using opposite Lyxor Japan and Invesco Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Japan position performs unexpectedly, Invesco Technology 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 Invesco Technology will offset losses from the drop in Invesco Technology's long position.| Lyxor Japan vs. UBSFund Solutions MSCI | Lyxor Japan vs. iShares VII PLC | Lyxor Japan vs. iShares SP 500 | Lyxor Japan vs. Lyxor UCITS Stoxx |
| Invesco Technology vs. Invesco AT1 Capital | Invesco Technology vs. Invesco EURO STOXX | Invesco Technology vs. Invesco AT1 Capital | Invesco Technology vs. Invesco Treasury Bond |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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