Correlation Between Lyxor UCITS and Lyxor Euro
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Lyxor Euro 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 Lyxor Euro 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 Lyxor Euro Government, you can compare the effects of market volatilities on Lyxor UCITS and Lyxor Euro 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 Lyxor Euro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Lyxor Euro.
Diversification Opportunities for Lyxor UCITS and Lyxor Euro
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lyxor and Lyxor is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Stoxx and Lyxor Euro Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Euro Government 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 Lyxor Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Euro Government has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Lyxor Euro go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Lyxor Euro
Assuming the 90 days trading horizon Lyxor UCITS Stoxx is expected to under-perform the Lyxor Euro. In addition to that, Lyxor UCITS is 2.2 times more volatile than Lyxor Euro Government. It trades about -0.21 of its total potential returns per unit of risk. Lyxor Euro Government is currently generating about 0.11 per unit of volatility. If you would invest 709.00 in Lyxor Euro Government on August 28, 2024 and sell it today you would earn a total of 7.00 from holding Lyxor Euro Government or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Stoxx vs. Lyxor Euro Government
Performance |
| Timeline |
| Lyxor UCITS Stoxx |
| Lyxor Euro Government |
Lyxor UCITS and Lyxor Euro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Lyxor Euro
The main advantage of trading using opposite Lyxor UCITS and Lyxor Euro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Lyxor Euro 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 Euro will offset losses from the drop in Lyxor Euro's long position.| Lyxor UCITS vs. Lyxor Japan UCITS | Lyxor UCITS vs. Lyxor Euro Government | Lyxor UCITS vs. Lyxor MSCI China |
| Lyxor Euro vs. UBSFund Solutions MSCI | Lyxor Euro vs. Vanguard SP 500 | Lyxor Euro vs. iShares VII PLC | Lyxor Euro vs. iShares Core SP |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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