Correlation Between Vanguard Funds and Lyxor Index
Can any of the company-specific risk be diversified away by investing in both Vanguard Funds 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 Vanguard Funds and Lyxor Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Funds Public and Lyxor Index Fund, you can compare the effects of market volatilities on Vanguard Funds 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 Vanguard Funds with a short position of Lyxor Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Funds and Lyxor Index.
Diversification Opportunities for Vanguard Funds and Lyxor Index
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and Lyxor is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Funds Public 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 Vanguard Funds 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 Vanguard Funds Public 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 Vanguard Funds i.e., Vanguard Funds and Lyxor Index go up and down completely randomly.
Pair Corralation between Vanguard Funds and Lyxor Index
Assuming the 90 days trading horizon Vanguard Funds Public is expected to generate 1.11 times more return on investment than Lyxor Index. However, Vanguard Funds is 1.11 times more volatile than Lyxor Index Fund. It trades about 0.13 of its potential returns per unit of risk. Lyxor Index Fund is currently generating about 0.07 per unit of risk. If you would invest 9,319 in Vanguard Funds Public on September 3, 2024 and sell it today you would earn a total of 1,521 from holding Vanguard Funds Public or generate 16.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.25% |
| Values | Daily Returns |
Vanguard Funds Public vs. Lyxor Index Fund
Performance |
| Timeline |
| Vanguard Funds Public |
| Lyxor Index Fund |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Vanguard Funds and Lyxor Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Funds and Lyxor Index
The main advantage of trading using opposite Vanguard Funds and Lyxor Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Funds 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.| Vanguard Funds vs. Vanguard ESG Developed | Vanguard Funds vs. Vanguard Funds Public | Vanguard Funds vs. Vanguard Funds Public | Vanguard Funds vs. Vanguard FTSE Developed |
| Lyxor Index vs. Lyxor Fed Funds | Lyxor Index vs. Lyxor BofAML USD | Lyxor Index vs. Lyxor 1 TecDAX | Lyxor Index vs. Lyxor UCITS EuroMTS |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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