Correlation Between Lyxor UCITS and Media Investment
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Media Investment 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 Media Investment 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 Media Investment Optimization, you can compare the effects of market volatilities on Lyxor UCITS and Media Investment 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 Media Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Media Investment.
Diversification Opportunities for Lyxor UCITS and Media Investment
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyxor and Media is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Ibex35 and Media Investment Optimization in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Investment Opt 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 Media Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Investment Opt has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Media Investment go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Media Investment
Assuming the 90 days trading horizon Lyxor UCITS Ibex35 is expected to generate 1.21 times more return on investment than Media Investment. However, Lyxor UCITS is 1.21 times more volatile than Media Investment Optimization. It trades about 0.5 of its potential returns per unit of risk. Media Investment Optimization is currently generating about -0.32 per unit of risk. If you would invest 12,352 in Lyxor UCITS Ibex35 on November 29, 2024 and sell it today you would earn a total of 1,264 from holding Lyxor UCITS Ibex35 or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Ibex35 vs. Media Investment Optimization
Performance |
| Timeline |
| Lyxor UCITS Ibex35 |
| Media Investment Opt |
Lyxor UCITS and Media Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Media Investment
The main advantage of trading using opposite Lyxor UCITS and Media Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Media Investment 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 Media Investment will offset losses from the drop in Media Investment's long position.The idea behind Lyxor UCITS Ibex35 and Media Investment Optimization 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.| Media Investment vs. All Iron Re | Media Investment vs. Azaria Rental SOCIMI | Media Investment vs. Millenium Hotels Real | Media Investment vs. Aedas Homes 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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