Correlation Between Lyxor UCITS and Lyxor Core
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Lyxor Core 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 UCITS and Lyxor Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS iBoxx and Lyxor Core UK, you can compare the effects of market volatilities on Lyxor UCITS and Lyxor Core 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 UCITS with a short position of Lyxor Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Lyxor Core.
Diversification Opportunities for Lyxor UCITS and Lyxor Core
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lyxor and Lyxor is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS iBoxx and Lyxor Core UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Core UK and Lyxor UCITS 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 UCITS iBoxx are associated (or correlated) with Lyxor Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Core UK has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Lyxor Core go up and down completely randomly.
Pair Corralation between Lyxor UCITS and Lyxor Core
Assuming the 90 days trading horizon Lyxor UCITS iBoxx is expected to generate 0.57 times more return on investment than Lyxor Core. However, Lyxor UCITS iBoxx is 1.76 times less risky than Lyxor Core. It trades about 0.02 of its potential returns per unit of risk. Lyxor Core UK is currently generating about -0.01 per unit of risk. If you would invest 769,515 in Lyxor UCITS iBoxx on September 3, 2024 and sell it today you would earn a total of 25,785 from holding Lyxor UCITS iBoxx or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.98% |
| Values | Daily Returns |
Lyxor UCITS iBoxx vs. Lyxor Core UK
Performance |
| Timeline |
| Lyxor UCITS iBoxx |
| Lyxor Core UK |
Lyxor UCITS and Lyxor Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and Lyxor Core
The main advantage of trading using opposite Lyxor UCITS and Lyxor Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Lyxor Core 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 Core will offset losses from the drop in Lyxor Core's long position.| Lyxor UCITS vs. SP 500 VIX | Lyxor UCITS vs. WisdomTree Natural Gas | Lyxor UCITS vs. WisdomTree Natural Gas | Lyxor UCITS vs. Leverage Shares 2x |
| Lyxor Core vs. WisdomTree Natural Gas | Lyxor Core vs. WisdomTree NASDAQ 100 | Lyxor Core vs. WisdomTree Silver 3x | Lyxor Core vs. WisdomTree SP 500 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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