Correlation Between Lyxor PEA and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both Lyxor PEA and SSgA SPDR 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 PEA and SSgA SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor PEA Nasdaq and SSgA SPDR ETFs, you can compare the effects of market volatilities on Lyxor PEA and SSgA SPDR 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 PEA with a short position of SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor PEA and SSgA SPDR.
Diversification Opportunities for Lyxor PEA and SSgA SPDR
Excellent diversification
The 3 months correlation between Lyxor and SSgA is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor PEA Nasdaq and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs and Lyxor PEA 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 PEA Nasdaq are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of Lyxor PEA i.e., Lyxor PEA and SSgA SPDR go up and down completely randomly.
Pair Corralation between Lyxor PEA and SSgA SPDR
Assuming the 90 days trading horizon Lyxor PEA Nasdaq is expected to generate 1.29 times more return on investment than SSgA SPDR. However, Lyxor PEA is 1.29 times more volatile than SSgA SPDR ETFs. It trades about 0.25 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about -0.14 per unit of risk. If you would invest 7,191 in Lyxor PEA Nasdaq on August 28, 2024 and sell it today you would earn a total of 805.00 from holding Lyxor PEA Nasdaq or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor PEA Nasdaq vs. SSgA SPDR ETFs
Performance |
| Timeline |
| Lyxor PEA Nasdaq |
| SSgA SPDR ETFs |
Lyxor PEA and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor PEA and SSgA SPDR
The main advantage of trading using opposite Lyxor PEA and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor PEA position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.| Lyxor PEA vs. Lyxor SP 500 | Lyxor PEA vs. Lyxor UCITS Daily | Lyxor PEA vs. Lyxor UCITS MSCI | Lyxor PEA vs. Lyxor Treasury 10Y |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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