Correlation Between Amundi Stoxx and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Amundi Stoxx 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 Amundi Stoxx and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi Stoxx Europe and Lyxor UCITS Stoxx, you can compare the effects of market volatilities on Amundi Stoxx 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 Amundi Stoxx with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Stoxx and Lyxor UCITS.
Diversification Opportunities for Amundi Stoxx and Lyxor UCITS
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amundi and Lyxor is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Stoxx Europe and Lyxor UCITS Stoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Stoxx and Amundi Stoxx 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 Amundi Stoxx Europe 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 Stoxx has no effect on the direction of Amundi Stoxx i.e., Amundi Stoxx and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Amundi Stoxx and Lyxor UCITS
Assuming the 90 days trading horizon Amundi Stoxx Europe is expected to generate 0.84 times more return on investment than Lyxor UCITS. However, Amundi Stoxx Europe is 1.19 times less risky than Lyxor UCITS. It trades about -0.11 of its potential returns per unit of risk. Lyxor UCITS Stoxx is currently generating about -0.15 per unit of risk. If you would invest 24,268 in Amundi Stoxx Europe on August 28, 2024 and sell it today you would lose (508.00) from holding Amundi Stoxx Europe or give up 2.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amundi Stoxx Europe vs. Lyxor UCITS Stoxx
Performance |
| Timeline |
| Amundi Stoxx Europe |
| Lyxor UCITS Stoxx |
Amundi Stoxx and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Stoxx and Lyxor UCITS
The main advantage of trading using opposite Amundi Stoxx and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Stoxx 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.The idea behind Amundi Stoxx Europe and Lyxor UCITS Stoxx 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.| Lyxor UCITS vs. Lyxor Index Fund | Lyxor UCITS vs. Multi Units France | Lyxor UCITS vs. Lyxor UCITS MSCI | Lyxor UCITS vs. Multi Units France |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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