Correlation Between Lyxor 1 and Shimano
Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and Shimano 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 Lyxor 1 and Shimano into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor 1 and Shimano, you can compare the effects of market volatilities on Lyxor 1 and Shimano 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 Lyxor 1 with a short position of Shimano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Shimano.
Diversification Opportunities for Lyxor 1 and Shimano
Very good diversification
The 3 months correlation between Lyxor and Shimano is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Shimano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano and Lyxor 1 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 Lyxor 1 are associated (or correlated) with Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Shimano go up and down completely randomly.
Pair Corralation between Lyxor 1 and Shimano
Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.49 times more return on investment than Shimano. However, Lyxor 1 is 2.03 times less risky than Shimano. It trades about 0.09 of its potential returns per unit of risk. Shimano is currently generating about -0.2 per unit of risk. If you would invest 2,382 in Lyxor 1 on September 4, 2024 and sell it today you would earn a total of 117.00 from holding Lyxor 1 or generate 4.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lyxor 1 vs. Shimano
Performance |
Timeline |
Lyxor 1 |
Shimano |
Lyxor 1 and Shimano Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lyxor 1 and Shimano
The main advantage of trading using opposite Lyxor 1 and Shimano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, Shimano 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 Shimano will offset losses from the drop in Shimano's long position.Lyxor 1 vs. Lyxor Fed Funds | Lyxor 1 vs. Lyxor BofAML USD | Lyxor 1 vs. Lyxor 1 TecDAX | Lyxor 1 vs. Lyxor UCITS EuroMTS |
Shimano vs. SINGAPORE AIRLINES | Shimano vs. NORWEGIAN AIR SHUT | Shimano vs. DELTA AIR LINES | Shimano vs. ALTAIR RES INC |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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