Correlation Between Lyxor UCITS and MULTI UNITS
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and MULTI UNITS 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 MULTI UNITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS Stoxx and MULTI UNITS LUXEMBOURG, you can compare the effects of market volatilities on Lyxor UCITS and MULTI UNITS 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 MULTI UNITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and MULTI UNITS.
Diversification Opportunities for Lyxor UCITS and MULTI UNITS
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lyxor and MULTI is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Stoxx and MULTI UNITS LUXEMBOURG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MULTI UNITS LUXEMBOURG 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 Stoxx are associated (or correlated) with MULTI UNITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MULTI UNITS LUXEMBOURG has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and MULTI UNITS go up and down completely randomly.
Pair Corralation between Lyxor UCITS and MULTI UNITS
Assuming the 90 days trading horizon Lyxor UCITS Stoxx is expected to under-perform the MULTI UNITS. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor UCITS Stoxx is 2.36 times less risky than MULTI UNITS. The etf trades about -0.01 of its potential returns per unit of risk. The MULTI UNITS LUXEMBOURG is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,123 in MULTI UNITS LUXEMBOURG on September 1, 2024 and sell it today you would earn a total of 548.00 from holding MULTI UNITS LUXEMBOURG or generate 13.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lyxor UCITS Stoxx vs. MULTI UNITS LUXEMBOURG
Performance |
| Timeline |
| Lyxor UCITS Stoxx |
| MULTI UNITS LUXEMBOURG |
Lyxor UCITS and MULTI UNITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and MULTI UNITS
The main advantage of trading using opposite Lyxor UCITS and MULTI UNITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, MULTI UNITS 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 MULTI UNITS will offset losses from the drop in MULTI UNITS's long position.| Lyxor UCITS vs. Lyxor Index Fund | Lyxor UCITS vs. Multi Units France | Lyxor UCITS vs. Lyxor UCITS MSCI | Lyxor UCITS vs. Multi Units France |
| MULTI UNITS vs. Multi Units France | MULTI UNITS vs. Lyxor MSCI China | MULTI UNITS vs. Lyxor Commodities RefinitivCoreCommodity | MULTI UNITS vs. Manitou BF SA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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