Correlation Between Lyxor MSCI and LG Battery
Can any of the company-specific risk be diversified away by investing in both Lyxor MSCI 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 MSCI 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 MSCI Brazil and LG Battery Value Chain, you can compare the effects of market volatilities on Lyxor MSCI 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 MSCI with a short position of LG Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor MSCI and LG Battery.
Diversification Opportunities for Lyxor MSCI and LG Battery
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lyxor and BATT is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor MSCI Brazil 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 MSCI 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 MSCI Brazil 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 MSCI i.e., Lyxor MSCI and LG Battery go up and down completely randomly.
Pair Corralation between Lyxor MSCI and LG Battery
Assuming the 90 days trading horizon Lyxor MSCI Brazil is expected to generate 0.83 times more return on investment than LG Battery. However, Lyxor MSCI Brazil is 1.2 times less risky than LG Battery. It trades about 0.1 of its potential returns per unit of risk. LG Battery Value Chain is currently generating about 0.03 per unit of risk. If you would invest 1,874 in Lyxor MSCI Brazil on November 29, 2024 and sell it today you would earn a total of 46.00 from holding Lyxor MSCI Brazil or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lyxor MSCI Brazil vs. LG Battery Value Chain
Performance |
| Timeline |
| Lyxor MSCI Brazil |
| LG Battery Value |
Lyxor MSCI and LG Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor MSCI and LG Battery
The main advantage of trading using opposite Lyxor MSCI and LG Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor MSCI 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.The idea behind Lyxor MSCI Brazil and LG Battery Value Chain pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| LG Battery vs. Vanguard FTSE Emerging | LG Battery vs. UBS ETF MSCI | LG Battery vs. Amundi MSCI Semiconductors | LG Battery vs. VanEck Solana ETN |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |