Correlation Between Metrovacesa and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Metrovacesa 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 Metrovacesa and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metrovacesa SA and Lyxor UCITS Ibex35, you can compare the effects of market volatilities on Metrovacesa 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 Metrovacesa with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metrovacesa and Lyxor UCITS.
Diversification Opportunities for Metrovacesa and Lyxor UCITS
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Metrovacesa and Lyxor is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Metrovacesa SA and Lyxor UCITS Ibex35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Ibex35 and Metrovacesa 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 Metrovacesa SA 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 Ibex35 has no effect on the direction of Metrovacesa i.e., Metrovacesa and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Metrovacesa and Lyxor UCITS
Assuming the 90 days trading horizon Metrovacesa SA is expected to generate 1.02 times more return on investment than Lyxor UCITS. However, Metrovacesa is 1.02 times more volatile than Lyxor UCITS Ibex35. It trades about 0.69 of its potential returns per unit of risk. Lyxor UCITS Ibex35 is currently generating about 0.54 per unit of risk. If you would invest 857.00 in Metrovacesa SA on November 28, 2024 and sell it today you would earn a total of 132.00 from holding Metrovacesa SA or generate 15.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metrovacesa SA vs. Lyxor UCITS Ibex35
Performance |
| Timeline |
| Metrovacesa SA |
| Lyxor UCITS Ibex35 |
Metrovacesa and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metrovacesa and Lyxor UCITS
The main advantage of trading using opposite Metrovacesa and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metrovacesa 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.| Metrovacesa vs. NH Hoteles | Metrovacesa vs. Fomento de Construcciones | Metrovacesa vs. Inmobiliaria Colonial SA | Metrovacesa vs. Aedas Homes SL |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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