Correlation Between Lyxor Smart and Lyxor Treasury
Can any of the company-specific risk be diversified away by investing in both Lyxor Smart and Lyxor Treasury 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 Treasury 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 Treasury 3 7Y, you can compare the effects of market volatilities on Lyxor Smart and Lyxor Treasury 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 Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Smart and Lyxor Treasury.
Diversification Opportunities for Lyxor Smart and Lyxor Treasury
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lyxor and Lyxor is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Smart Overnight and Lyxor Treasury 3 7Y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Treasury 3 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 Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Treasury 3 has no effect on the direction of Lyxor Smart i.e., Lyxor Smart and Lyxor Treasury go up and down completely randomly.
Pair Corralation between Lyxor Smart and Lyxor Treasury
Assuming the 90 days trading horizon Lyxor Smart Overnight is expected to generate 0.06 times more return on investment than Lyxor Treasury. However, Lyxor Smart Overnight is 17.02 times less risky than Lyxor Treasury. It trades about 0.97 of its potential returns per unit of risk. Lyxor Treasury 3 7Y is currently generating about 0.03 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor Smart Overnight vs. Lyxor Treasury 3 7Y
Performance |
| Timeline |
| Lyxor Smart Overnight |
| Lyxor Treasury 3 |
Lyxor Smart and Lyxor Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Smart and Lyxor Treasury
The main advantage of trading using opposite Lyxor Smart and Lyxor Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Smart position performs unexpectedly, Lyxor Treasury 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 Treasury will offset losses from the drop in Lyxor Treasury'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 Treasury vs. Lyxor Smart Overnight | Lyxor Treasury vs. Lyxor UCITS EuroMTS | Lyxor Treasury vs. Lyxor Core UK | Lyxor Treasury 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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