Correlation Between Microsoft and Lyxor 1
Can any of the company-specific risk be diversified away by investing in both Microsoft and Lyxor 1 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 Microsoft and Lyxor 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Lyxor 1 , you can compare the effects of market volatilities on Microsoft and Lyxor 1 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 Microsoft with a short position of Lyxor 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Lyxor 1.
Diversification Opportunities for Microsoft and Lyxor 1
Significant diversification
The 3 months correlation between Microsoft and Lyxor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Lyxor 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor 1 and Microsoft 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 Microsoft are associated (or correlated) with Lyxor 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor 1 has no effect on the direction of Microsoft i.e., Microsoft and Lyxor 1 go up and down completely randomly.
Pair Corralation between Microsoft and Lyxor 1
Given the investment horizon of 90 days Microsoft is expected to under-perform the Lyxor 1. In addition to that, Microsoft is 1.79 times more volatile than Lyxor 1 . It trades about -0.06 of its total potential returns per unit of risk. Lyxor 1 is currently generating about -0.09 per unit of volatility. If you would invest 2,473 in Lyxor 1 on August 24, 2024 and sell it today you would lose (47.00) from holding Lyxor 1 or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Microsoft vs. Lyxor 1
Performance |
| Timeline |
| Microsoft |
| Lyxor 1 |
Microsoft and Lyxor 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Lyxor 1
The main advantage of trading using opposite Microsoft and Lyxor 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Lyxor 1 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 1 will offset losses from the drop in Lyxor 1's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Lyxor 1 vs. Lyxor Fed Funds | Lyxor 1 vs. Lyxor BofAML USD | Lyxor 1 vs. Lyxor Index Fund | Lyxor 1 vs. Lyxor 1 TecDAX |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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