Correlation Between Lyxor Smart and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both Lyxor Smart 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 Smart 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 Smart Overnight and Lyxor UCITS iBoxx, you can compare the effects of market volatilities on Lyxor Smart 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 Smart with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Smart and Lyxor UCITS.
Diversification Opportunities for Lyxor Smart and Lyxor UCITS
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lyxor and Lyxor is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Smart Overnight and Lyxor UCITS iBoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS iBoxx 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 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 iBoxx has no effect on the direction of Lyxor Smart i.e., Lyxor Smart and Lyxor UCITS go up and down completely randomly.
Pair Corralation between Lyxor Smart and Lyxor UCITS
Assuming the 90 days trading horizon Lyxor Smart Overnight is expected to generate 0.05 times more return on investment than Lyxor UCITS. However, Lyxor Smart Overnight is 21.07 times less risky than Lyxor UCITS. It trades about 0.97 of its potential returns per unit of risk. Lyxor UCITS iBoxx is currently generating about 0.02 per unit of risk. If you would invest 109,910 in Lyxor Smart Overnight on September 3, 2024 and sell it today you would earn a total of 12,110 from holding Lyxor Smart Overnight or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.98% |
| Values | Daily Returns |
Lyxor Smart Overnight vs. Lyxor UCITS iBoxx
Performance |
| Timeline |
| Lyxor Smart Overnight |
| Lyxor UCITS iBoxx |
Lyxor Smart and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Smart and Lyxor UCITS
The main advantage of trading using opposite Lyxor Smart and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Smart 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 Smart vs. Lyxor UCITS EuroMTS | Lyxor Smart vs. Lyxor Core UK | Lyxor Smart vs. Lyxor Core Global | Lyxor Smart vs. Lyxor UCITS iBoxx |
| Lyxor UCITS vs. SP 500 VIX | Lyxor UCITS vs. WisdomTree Natural Gas | Lyxor UCITS vs. WisdomTree Natural Gas | Lyxor UCITS vs. Leverage Shares 2x |
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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