Correlation Between Xtrackers MSCI and Lyxor 10Y
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and Lyxor 10Y 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 10Y into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI World and Lyxor 10Y Inflation, you can compare the effects of market volatilities on Xtrackers MSCI and Lyxor 10Y 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 10Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and Lyxor 10Y.
Diversification Opportunities for Xtrackers MSCI and Lyxor 10Y
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xtrackers and Lyxor is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI World and Lyxor 10Y Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor 10Y Inflation 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 World are associated (or correlated) with Lyxor 10Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor 10Y Inflation has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and Lyxor 10Y go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and Lyxor 10Y
Assuming the 90 days trading horizon Xtrackers MSCI World is expected to generate 5.31 times more return on investment than Lyxor 10Y. However, Xtrackers MSCI is 5.31 times more volatile than Lyxor 10Y Inflation. It trades about 0.06 of its potential returns per unit of risk. Lyxor 10Y Inflation is currently generating about 0.12 per unit of risk. If you would invest 9,289 in Xtrackers MSCI World on August 24, 2024 and sell it today you would earn a total of 143.00 from holding Xtrackers MSCI World or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI World vs. Lyxor 10Y Inflation
Performance |
| Timeline |
| Xtrackers MSCI World |
| Lyxor 10Y Inflation |
Xtrackers MSCI and Lyxor 10Y Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and Lyxor 10Y
The main advantage of trading using opposite Xtrackers MSCI and Lyxor 10Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, Lyxor 10Y 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 10Y will offset losses from the drop in Lyxor 10Y'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 10Y vs. Lyxor Smart Overnight | Lyxor 10Y vs. Lyxor UCITS EuroMTS | Lyxor 10Y vs. Lyxor Core UK | Lyxor 10Y vs. Lyxor Core Global |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |