Correlation Between Xtrackers MSCI and Lyxor Smart
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and Lyxor Smart 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 Xtrackers MSCI and Lyxor Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI and Lyxor Smart Overnight, you can compare the effects of market volatilities on Xtrackers MSCI and Lyxor Smart 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 Xtrackers MSCI with a short position of Lyxor Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and Lyxor Smart.
Diversification Opportunities for Xtrackers MSCI and Lyxor Smart
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and Lyxor is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI and Lyxor Smart Overnight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Smart Overnight and Xtrackers MSCI 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 Xtrackers MSCI are associated (or correlated) with Lyxor Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Smart Overnight has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and Lyxor Smart go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and Lyxor Smart
Assuming the 90 days trading horizon Xtrackers MSCI is expected to under-perform the Lyxor Smart. In addition to that, Xtrackers MSCI is 45.14 times more volatile than Lyxor Smart Overnight. It trades about -0.19 of its total potential returns per unit of risk. Lyxor Smart Overnight is currently generating about 0.69 per unit of volatility. If you would invest 121,418 in Lyxor Smart Overnight on August 24, 2024 and sell it today you would earn a total of 480.00 from holding Lyxor Smart Overnight or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI vs. Lyxor Smart Overnight
Performance |
| Timeline |
| Xtrackers MSCI |
| Lyxor Smart Overnight |
Xtrackers MSCI and Lyxor Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and Lyxor Smart
The main advantage of trading using opposite Xtrackers MSCI and Lyxor Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, Lyxor Smart 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 Smart will offset losses from the drop in Lyxor Smart's long position.| Xtrackers MSCI vs. Leverage Shares 3x | Xtrackers MSCI vs. WisdomTree SP 500 | Xtrackers MSCI vs. WisdomTree Silver 3x | Xtrackers MSCI vs. Leverage Shares 3x |
| Lyxor Smart vs. Leverage Shares 3x | Lyxor Smart vs. Leverage Shares 3x | Lyxor Smart vs. Leverage Shares 3x | Lyxor Smart vs. WisdomTree Short GBP |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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