Correlation Between Lyxor UCITS and Lyxor MSCI

Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Lyxor MSCI 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 Lyxor MSCI 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 Lyxor MSCI Eastern, you can compare the effects of market volatilities on Lyxor UCITS and Lyxor MSCI 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 Lyxor MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Lyxor MSCI.

Diversification Opportunities for Lyxor UCITS and Lyxor MSCI

0.0

Correlation Coefficient

Lyxor UCITS  Lyxor MSCI

Pay attention - limited upside

The 3 months correlation between Lyxor and Lyxor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and Lyxor MSCI Eastern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor MSCI Eastern 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 Lyxor MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor MSCI Eastern has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Lyxor MSCI go up and down completely randomly.

Pair Corralation between Lyxor UCITS and Lyxor MSCI

If you would invest  13,845  in Lyxor UCITS Japan on September 3, 2024 and sell it today you would earn a total of  3,649  from holding Lyxor UCITS Japan or generate 26.36% return on investment over 90 days.

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

Lyxor UCITS Japan  vs.  Lyxor MSCI Eastern

Lyxor UCITS Japan

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Lyxor UCITS Japan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Lyxor UCITS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Lyxor MSCI Eastern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lyxor MSCI Eastern has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Lyxor MSCI is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Lyxor UCITS and Lyxor MSCI

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

The idea behind Lyxor UCITS Japan and Lyxor MSCI Eastern 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.