Correlation Between Granite 3x and Lyxor Index

Can any of the company-specific risk be diversified away by investing in both Granite 3x 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 Granite 3x and Lyxor Index into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Granite 3x LVMH and Lyxor Index Fund, you can compare the effects of market volatilities on Granite 3x 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 Granite 3x with a short position of Lyxor Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Lyxor Index.

Diversification Opportunities for Granite 3x and Lyxor Index

0.0

Correlation Coefficient

Granite 3x  Lyxor Index

Pay attention - limited upside

The 3 months correlation between Granite and Lyxor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH 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 Granite 3x 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 Granite 3x LVMH 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 Granite 3x i.e., Granite 3x and Lyxor Index go up and down completely randomly.

Pair Corralation between Granite 3x and Lyxor Index

If you would invest  3,101  in Lyxor Index Fund on September 11, 2024 and sell it today you would earn a total of  305.00  from holding Lyxor Index Fund or generate 9.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Granite 3x LVMH  vs.  Lyxor Index Fund

Granite 3x LVMH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Granite 3x LVMH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Granite 3x is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lyxor Index Fund

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor Index Fund are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Lyxor Index may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Granite 3x and Lyxor Index

The main advantage of trading using opposite Granite 3x and Lyxor Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x 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.

The idea behind Granite 3x LVMH and Lyxor Index Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.