Correlation Between Xtrackers Nikkei and LYXOR EURO
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By analyzing existing cross correlation between Xtrackers Nikkei 225 and LYXOR EURO STOXX, you can compare the effects of market volatilities on Xtrackers Nikkei and LYXOR EURO 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 Nikkei with a short position of LYXOR EURO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Nikkei and LYXOR EURO.
Diversification Opportunities for Xtrackers Nikkei and LYXOR EURO
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Xtrackers and LYXOR is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Nikkei 225 and LYXOR EURO STOXX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYXOR EURO STOXX and Xtrackers Nikkei 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 Nikkei 225 are associated (or correlated) with LYXOR EURO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYXOR EURO STOXX has no effect on the direction of Xtrackers Nikkei i.e., Xtrackers Nikkei and LYXOR EURO go up and down completely randomly.
Pair Corralation between Xtrackers Nikkei and LYXOR EURO
Assuming the 90 days trading horizon Xtrackers Nikkei 225 is expected to generate 0.48 times more return on investment than LYXOR EURO. However, Xtrackers Nikkei 225 is 2.09 times less risky than LYXOR EURO. It trades about 0.1 of its potential returns per unit of risk. LYXOR EURO STOXX is currently generating about -0.08 per unit of risk. If you would invest 2,496 in Xtrackers Nikkei 225 on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Xtrackers Nikkei 225 or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers Nikkei 225 vs. LYXOR EURO STOXX
Performance |
| Timeline |
| Xtrackers Nikkei 225 |
| LYXOR EURO STOXX |
Xtrackers Nikkei and LYXOR EURO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Nikkei and LYXOR EURO
The main advantage of trading using opposite Xtrackers Nikkei and LYXOR EURO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Nikkei position performs unexpectedly, LYXOR EURO 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 EURO will offset losses from the drop in LYXOR EURO's long position.| Xtrackers Nikkei vs. UBS Fund Solutions | Xtrackers Nikkei vs. Xtrackers II | Xtrackers Nikkei vs. iShares VII PLC | Xtrackers Nikkei vs. SPDR Gold Shares |
| LYXOR EURO vs. LYXOR EURO STOXX | LYXOR EURO vs. LYXOR DAILY SHORTDAX | LYXOR EURO vs. LYXOR Index Fund | LYXOR EURO vs. LYXOR DAILY SHORTDAX |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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