Correlation Between Lyxor Treasury and Lyxor Core
Can any of the company-specific risk be diversified away by investing in both Lyxor Treasury 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 Treasury 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 Treasury 3 7Y and Lyxor Core UK, you can compare the effects of market volatilities on Lyxor Treasury 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 Treasury with a short position of Lyxor Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Treasury and Lyxor Core.
Diversification Opportunities for Lyxor Treasury and Lyxor Core
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lyxor and Lyxor is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Treasury 3 7Y 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 Treasury 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 Treasury 3 7Y 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 Treasury i.e., Lyxor Treasury and Lyxor Core go up and down completely randomly.
Pair Corralation between Lyxor Treasury and Lyxor Core
Assuming the 90 days trading horizon Lyxor Treasury 3 7Y is expected to generate 0.5 times more return on investment than Lyxor Core. However, Lyxor Treasury 3 7Y is 2.02 times less risky than Lyxor Core. It trades about -0.06 of its potential returns per unit of risk. Lyxor Core UK is currently generating about -0.06 per unit of risk. If you would invest 1,067 in Lyxor Treasury 3 7Y on September 3, 2024 and sell it today you would lose (10.00) from holding Lyxor Treasury 3 7Y or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor Treasury 3 7Y vs. Lyxor Core UK
Performance |
| Timeline |
| Lyxor Treasury 3 |
| Lyxor Core UK |
Lyxor Treasury and Lyxor Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor Treasury and Lyxor Core
The main advantage of trading using opposite Lyxor Treasury and Lyxor Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Treasury 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 Treasury vs. Lyxor Smart Overnight | Lyxor Treasury vs. Lyxor UCITS EuroMTS | Lyxor Treasury vs. Lyxor Core UK | Lyxor Treasury vs. Lyxor Core Global |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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