Correlation Between Lyxor Smart and Lyxor 10Y
Can any of the company-specific risk be diversified away by investing in both Lyxor Smart and Lyxor 10Y 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 Lyxor 10Y 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 Lyxor 10Y Inflation, you can compare the effects of market volatilities on Lyxor Smart and Lyxor 10Y 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 Lyxor 10Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Smart and Lyxor 10Y.
Diversification Opportunities for Lyxor Smart and Lyxor 10Y
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lyxor and Lyxor is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Smart Overnight and Lyxor 10Y Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor 10Y Inflation 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 Lyxor 10Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor 10Y Inflation has no effect on the direction of Lyxor Smart i.e., Lyxor Smart and Lyxor 10Y go up and down completely randomly.
Pair Corralation between Lyxor Smart and Lyxor 10Y
Assuming the 90 days trading horizon Lyxor Smart Overnight is expected to generate 0.1 times more return on investment than Lyxor 10Y. However, Lyxor Smart Overnight is 10.31 times less risky than Lyxor 10Y. It trades about 0.72 of its potential returns per unit of risk. Lyxor 10Y Inflation is currently generating about 0.06 per unit of risk. If you would invest 121,446 in Lyxor Smart Overnight on August 28, 2024 and sell it today you would earn a total of 477.00 from holding Lyxor Smart Overnight or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor Smart Overnight vs. Lyxor 10Y Inflation
Performance |
| Timeline |
| Lyxor Smart Overnight |
| Lyxor 10Y Inflation |
Lyxor Smart and Lyxor 10Y Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Smart and Lyxor 10Y
The main advantage of trading using opposite Lyxor Smart and Lyxor 10Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Smart position performs unexpectedly, Lyxor 10Y 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 10Y will offset losses from the drop in Lyxor 10Y's long position.| Lyxor Smart vs. Vanguard FTSE Developed | Lyxor Smart vs. Leverage Shares 2x | Lyxor Smart vs. Amundi Index Solutions | Lyxor Smart vs. Amundi Index Solutions |
| Lyxor 10Y vs. Lyxor Smart Overnight | Lyxor 10Y vs. Lyxor UCITS EuroMTS | Lyxor 10Y vs. Lyxor Core UK | Lyxor 10Y vs. Lyxor Core Global |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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