Correlation Between MULTI UNITS and Lyxor Index
Can any of the company-specific risk be diversified away by investing in both MULTI UNITS and Lyxor Index 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 MULTI UNITS and Lyxor Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MULTI UNITS LUXEMBOURG and Lyxor Index Fund, you can compare the effects of market volatilities on MULTI UNITS and Lyxor Index 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 MULTI UNITS with a short position of Lyxor Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of MULTI UNITS and Lyxor Index.
Diversification Opportunities for MULTI UNITS and Lyxor Index
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MULTI and Lyxor is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding MULTI UNITS LUXEMBOURG and Lyxor Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Index Fund and MULTI UNITS 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 MULTI UNITS LUXEMBOURG are associated (or correlated) with Lyxor Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Index Fund has no effect on the direction of MULTI UNITS i.e., MULTI UNITS and Lyxor Index go up and down completely randomly.
Pair Corralation between MULTI UNITS and Lyxor Index
Assuming the 90 days trading horizon MULTI UNITS LUXEMBOURG is expected to generate 2.39 times more return on investment than Lyxor Index. However, MULTI UNITS is 2.39 times more volatile than Lyxor Index Fund. It trades about 0.31 of its potential returns per unit of risk. Lyxor Index Fund is currently generating about -0.12 per unit of risk. If you would invest 4,022 in MULTI UNITS LUXEMBOURG on September 3, 2024 and sell it today you would earn a total of 600.00 from holding MULTI UNITS LUXEMBOURG or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MULTI UNITS LUXEMBOURG vs. Lyxor Index Fund
Performance |
| Timeline |
| MULTI UNITS LUXEMBOURG |
| Lyxor Index Fund |
MULTI UNITS and Lyxor Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MULTI UNITS and Lyxor Index
The main advantage of trading using opposite MULTI UNITS and Lyxor Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MULTI UNITS position performs unexpectedly, Lyxor Index 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 Index will offset losses from the drop in Lyxor Index's long position.| MULTI UNITS vs. Amundi Index Solutions | MULTI UNITS vs. Manitou BF SA | MULTI UNITS vs. Ossiam Minimum Variance | MULTI UNITS vs. Granite 3x LVMH |
| Lyxor Index vs. Amundi Index Solutions | Lyxor Index vs. Manitou BF SA | Lyxor Index vs. Ossiam Minimum Variance | Lyxor Index vs. Granite 3x LVMH |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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