Correlation Between Multi Units and Lyxor BofAML
Can any of the company-specific risk be diversified away by investing in both Multi Units and Lyxor BofAML 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 BofAML 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 BofAML High, you can compare the effects of market volatilities on Multi Units and Lyxor BofAML 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 BofAML. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and Lyxor BofAML.
Diversification Opportunities for Multi Units and Lyxor BofAML
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Multi and Lyxor is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units Luxembourg and Lyxor BofAML High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor BofAML High 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 BofAML. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor BofAML High has no effect on the direction of Multi Units i.e., Multi Units and Lyxor BofAML go up and down completely randomly.
Pair Corralation between Multi Units and Lyxor BofAML
Assuming the 90 days trading horizon Multi Units Luxembourg is expected to under-perform the Lyxor BofAML. In addition to that, Multi Units is 6.17 times more volatile than Lyxor BofAML High. It trades about -0.09 of its total potential returns per unit of risk. Lyxor BofAML High is currently generating about -0.07 per unit of volatility. If you would invest 9,171 in Lyxor BofAML High on November 2, 2024 and sell it today you would lose (79.00) from holding Lyxor BofAML High or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Multi Units Luxembourg vs. Lyxor BofAML High
Performance |
| Timeline |
| Multi Units Luxembourg |
| Lyxor BofAML High |
Multi Units and Lyxor BofAML Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Units and Lyxor BofAML
The main advantage of trading using opposite Multi Units and Lyxor BofAML positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units position performs unexpectedly, Lyxor BofAML 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 BofAML will offset losses from the drop in Lyxor BofAML's long position.| Multi Units vs. Multi Units Luxembourg | Multi Units vs. Multi Units Luxembourg | Multi Units vs. Multi Units France | Multi Units vs. Multi Units Luxembourg |
| Lyxor BofAML vs. Lyxor SP 500 | Lyxor BofAML vs. Lyxor UCITS Daily | Lyxor BofAML vs. Lyxor UCITS MSCI | Lyxor BofAML vs. Lyxor Treasury 10Y |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |