Correlation Between Lyxor PEA and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Lyxor PEA 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 Lyxor PEA and Lyxor UCITS 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 Lyxor UCITS FTSE, you can compare the effects of market volatilities on Lyxor PEA 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 Lyxor PEA with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor PEA and Lyxor UCITS.
Diversification Opportunities for Lyxor PEA and Lyxor UCITS
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lyxor and Lyxor is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor PEA Nasdaq and Lyxor UCITS FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS FTSE 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 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 FTSE has no effect on the direction of Lyxor PEA i.e., Lyxor PEA and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Lyxor PEA and Lyxor UCITS
Assuming the 90 days trading horizon Lyxor PEA Nasdaq is expected to generate 0.88 times more return on investment than Lyxor UCITS. However, Lyxor PEA Nasdaq is 1.14 times less risky than Lyxor UCITS. It trades about 0.12 of its potential returns per unit of risk. Lyxor UCITS FTSE is currently generating about 0.04 per unit of risk. If you would invest 5,816 in Lyxor PEA Nasdaq on August 26, 2024 and sell it today you would earn a total of 2,164 from holding Lyxor PEA Nasdaq or generate 37.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor PEA Nasdaq vs. Lyxor UCITS FTSE
Performance |
| Timeline |
| Lyxor PEA Nasdaq |
| Lyxor UCITS FTSE |
Lyxor PEA and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor PEA and Lyxor UCITS
The main advantage of trading using opposite Lyxor PEA and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor PEA 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.| Lyxor PEA vs. Lyxor UCITS Japan | Lyxor PEA vs. Lyxor UCITS Stoxx | Lyxor PEA vs. Gold Bullion Securities | Lyxor PEA vs. Xtrackers MSCI Europe |
| Lyxor UCITS vs. Lyxor UCITS Japan | Lyxor UCITS vs. Lyxor UCITS Stoxx | Lyxor UCITS vs. Gold Bullion Securities | Lyxor UCITS vs. Xtrackers MSCI Europe |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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