Correlation Between Making Science and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Making Science and Lyxor UCITS 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 Making Science and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Making Science Group and Lyxor UCITS Ibex35, you can compare the effects of market volatilities on Making Science and Lyxor UCITS 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 Making Science with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Making Science and Lyxor UCITS.
Diversification Opportunities for Making Science and Lyxor UCITS
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Making and Lyxor is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Making Science Group and Lyxor UCITS Ibex35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Ibex35 and Making Science 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 Making Science Group are associated (or correlated) with Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS Ibex35 has no effect on the direction of Making Science i.e., Making Science and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Making Science and Lyxor UCITS
Assuming the 90 days trading horizon Making Science Group is expected to under-perform the Lyxor UCITS. In addition to that, Making Science is 1.88 times more volatile than Lyxor UCITS Ibex35. It trades about -0.03 of its total potential returns per unit of risk. Lyxor UCITS Ibex35 is currently generating about 0.09 per unit of volatility. 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 |
Making Science Group vs. Lyxor UCITS Ibex35
Performance |
| Timeline |
| Making Science Group |
| Lyxor UCITS Ibex35 |
Making Science and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Making Science and Lyxor UCITS
The main advantage of trading using opposite Making Science and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Making Science position performs unexpectedly, Lyxor UCITS 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 Lyxor UCITS will offset losses from the drop in Lyxor UCITS's long position.| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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