Correlation Between Lyxor UCITS and Making Science
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Making Science 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 Making Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS Ibex35 and Making Science Group, you can compare the effects of market volatilities on Lyxor UCITS and Making Science 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 Making Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Making Science.
Diversification Opportunities for Lyxor UCITS and Making Science
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lyxor and Making is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Ibex35 and Making Science Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Making Science Group 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 Ibex35 are associated (or correlated) with Making Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Making Science Group has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Making Science go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Making Science
Assuming the 90 days trading horizon Lyxor UCITS Ibex35 is expected to generate 0.53 times more return on investment than Making Science. However, Lyxor UCITS Ibex35 is 1.88 times less risky than Making Science. It trades about 0.09 of its potential returns per unit of risk. Making Science Group is currently generating about -0.03 per unit of risk. If you would invest 10,123 in Lyxor UCITS Ibex35 on September 2, 2024 and sell it today you would earn a total of 1,997 from holding Lyxor UCITS Ibex35 or generate 19.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Ibex35 vs. Making Science Group
Performance |
| Timeline |
| Lyxor UCITS Ibex35 |
| Making Science Group |
Lyxor UCITS and Making Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Making Science
The main advantage of trading using opposite Lyxor UCITS and Making Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Making Science 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 Making Science will offset losses from the drop in Making Science's long position.The idea behind Lyxor UCITS Ibex35 and Making Science Group 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.| Making Science vs. Gigas Hosting SA | Making Science vs. Izertis Sa | Making Science vs. Lleidanetworks Serveis Telematics | Making Science vs. Atrys Health SL |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |