Correlation Between Lyxor UCITS and Ossiam Bloomberg

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

By analyzing existing cross correlation between Lyxor UCITS Japan and Ossiam Bloomberg USA, you can compare the effects of market volatilities on Lyxor UCITS and Ossiam Bloomberg 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 UCITS with a short position of Ossiam Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Ossiam Bloomberg.

Diversification Opportunities for Lyxor UCITS and Ossiam Bloomberg

0.24

Correlation Coefficient

Lyxor UCITS  Ossiam Bloomberg

Modest diversification

The 3 months correlation between Lyxor and Ossiam is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and Ossiam Bloomberg USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ossiam Bloomberg USA and Lyxor UCITS 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 UCITS Japan are associated (or correlated) with Ossiam Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ossiam Bloomberg USA has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Ossiam Bloomberg go up and down completely randomly.

Pair Corralation between Lyxor UCITS and Ossiam Bloomberg

Assuming the 90 days trading horizon Lyxor UCITS is expected to generate 1.71 times less return on investment than Ossiam Bloomberg. In addition to that, Lyxor UCITS is 1.36 times more volatile than Ossiam Bloomberg USA. It trades about 0.06 of its total potential returns per unit of risk. Ossiam Bloomberg USA is currently generating about 0.14 per unit of volatility. If you would invest  10,982  in Ossiam Bloomberg USA on September 2, 2024 and sell it today you would earn a total of  3,135  from holding Ossiam Bloomberg USA or generate 28.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lyxor UCITS Japan  vs.  Ossiam Bloomberg USA

Lyxor UCITS Japan

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor UCITS Japan are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Lyxor UCITS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ossiam Bloomberg USA

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ossiam Bloomberg USA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ossiam Bloomberg may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lyxor UCITS and Ossiam Bloomberg

The main advantage of trading using opposite Lyxor UCITS and Ossiam Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Ossiam Bloomberg 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 Ossiam Bloomberg will offset losses from the drop in Ossiam Bloomberg's long position.

The idea behind Lyxor UCITS Japan and Ossiam Bloomberg USA 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.