Correlation Between Lyxor UCITS and Vanguard USD
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Vanguard USD 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 Vanguard USD 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 Vanguard USD Treasury, you can compare the effects of market volatilities on Lyxor UCITS and Vanguard USD 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 Vanguard USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Vanguard USD.
Diversification Opportunities for Lyxor UCITS and Vanguard USD
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lyxor and Vanguard is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Stoxx and Vanguard USD Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard USD Treasury 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 Vanguard USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard USD Treasury has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Vanguard USD go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Vanguard USD
Assuming the 90 days trading horizon Lyxor UCITS Stoxx is expected to under-perform the Vanguard USD. In addition to that, Lyxor UCITS is 3.25 times more volatile than Vanguard USD Treasury. It trades about -0.11 of its total potential returns per unit of risk. Vanguard USD Treasury is currently generating about 0.53 per unit of volatility. If you would invest 2,229 in Vanguard USD Treasury on September 4, 2024 and sell it today you would earn a total of 74.00 from holding Vanguard USD Treasury or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lyxor UCITS Stoxx vs. Vanguard USD Treasury
Performance |
| Timeline |
| Lyxor UCITS Stoxx |
| Vanguard USD Treasury |
Lyxor UCITS and Vanguard USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Vanguard USD
The main advantage of trading using opposite Lyxor UCITS and Vanguard USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Vanguard USD 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 Vanguard USD will offset losses from the drop in Vanguard USD's long position.| Lyxor UCITS vs. UBSFund Solutions MSCI | Lyxor UCITS vs. Vanguard SP 500 | Lyxor UCITS vs. iShares VII PLC | Lyxor UCITS vs. iShares Core SP |
| Vanguard USD vs. UBSFund Solutions MSCI | Vanguard USD vs. Vanguard SP 500 | Vanguard USD vs. iShares VII PLC | Vanguard USD 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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