Correlation Between IShares VII and LYXOR DAILY
Can any of the company-specific risk be diversified away by investing in both IShares VII and LYXOR DAILY 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 IShares VII and LYXOR DAILY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares VII PLC and LYXOR DAILY SHORTDAX, you can compare the effects of market volatilities on IShares VII and LYXOR DAILY 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 IShares VII with a short position of LYXOR DAILY. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares VII and LYXOR DAILY.
Diversification Opportunities for IShares VII and LYXOR DAILY
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and LYXOR is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII PLC and LYXOR DAILY SHORTDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYXOR DAILY SHORTDAX and IShares VII 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 iShares VII PLC are associated (or correlated) with LYXOR DAILY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYXOR DAILY SHORTDAX has no effect on the direction of IShares VII i.e., IShares VII and LYXOR DAILY go up and down completely randomly.
Pair Corralation between IShares VII and LYXOR DAILY
Assuming the 90 days trading horizon iShares VII PLC is expected to generate 0.76 times more return on investment than LYXOR DAILY. However, iShares VII PLC is 1.31 times less risky than LYXOR DAILY. It trades about 0.06 of its potential returns per unit of risk. LYXOR DAILY SHORTDAX is currently generating about -0.04 per unit of risk. If you would invest 22,830 in iShares VII PLC on September 5, 2024 and sell it today you would earn a total of 2,135 from holding iShares VII PLC or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares VII PLC vs. LYXOR DAILY SHORTDAX
Performance |
| Timeline |
| iShares VII PLC |
| LYXOR DAILY SHORTDAX |
IShares VII and LYXOR DAILY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares VII and LYXOR DAILY
The main advantage of trading using opposite IShares VII and LYXOR DAILY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares VII position performs unexpectedly, LYXOR DAILY 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 DAILY will offset losses from the drop in LYXOR DAILY's long position.| IShares VII vs. UBS Fund Solutions | IShares VII vs. Xtrackers II | IShares VII vs. Xtrackers Nikkei 225 | IShares VII vs. SPDR Gold Shares |
| LYXOR DAILY vs. LYXOR EURO STOXX | LYXOR DAILY vs. LYXOR DAILY SHORTDAX | LYXOR DAILY vs. LYXOR EURO STOXX | LYXOR DAILY vs. iShares Govt Bond |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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