Correlation Between Lyxor Smart and CLUS
Can any of the company-specific risk be diversified away by investing in both Lyxor Smart and CLUS 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 Smart and CLUS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor Smart Overnight and CLUS, you can compare the effects of market volatilities on Lyxor Smart and CLUS 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 Smart with a short position of CLUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Smart and CLUS.
Diversification Opportunities for Lyxor Smart and CLUS
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lyxor and CLUS is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Smart Overnight and CLUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLUS and Lyxor Smart 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 Smart Overnight are associated (or correlated) with CLUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLUS has no effect on the direction of Lyxor Smart i.e., Lyxor Smart and CLUS go up and down completely randomly.
Pair Corralation between Lyxor Smart and CLUS
Assuming the 90 days trading horizon Lyxor Smart is expected to generate 218.96 times less return on investment than CLUS. But when comparing it to its historical volatility, Lyxor Smart Overnight is 2310.6 times less risky than CLUS. It trades about 0.89 of its potential returns per unit of risk. CLUS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 31,500 in CLUS on December 11, 2024 and sell it today you would lose (11,500) from holding CLUS or give up 36.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Lyxor Smart Overnight vs. CLUS
Performance |
| Timeline |
| Lyxor Smart Overnight |
| CLUS |
Lyxor Smart and CLUS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Smart and CLUS
The main advantage of trading using opposite Lyxor Smart and CLUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Smart position performs unexpectedly, CLUS 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 CLUS will offset losses from the drop in CLUS's long position.| Lyxor Smart vs. Lyxor UCITS EuroMTS | Lyxor Smart vs. Lyxor Core UK | Lyxor Smart vs. Lyxor Core Global | Lyxor Smart vs. Lyxor UCITS iBoxx |
| CLUS vs. Embotelladora Andina SA | CLUS vs. Embotelladora Andina SA | CLUS vs. Apple Rush | CLUS vs. Alkame Holdings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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