Correlation Between SCORADR110EO 78769723 and Lyxor 1

Can any of the company-specific risk be diversified away by investing in both SCORADR110EO 78769723 and Lyxor 1 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 SCORADR110EO 78769723 and Lyxor 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SCORADR110EO 78769723 and Lyxor 1 , you can compare the effects of market volatilities on SCORADR110EO 78769723 and Lyxor 1 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 SCORADR110EO 78769723 with a short position of Lyxor 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCORADR110EO 78769723 and Lyxor 1.

Diversification Opportunities for SCORADR110EO 78769723 and Lyxor 1

0.63

Correlation Coefficient

SCORADR110EO 78769723  Lyxor 1

Poor diversification

The 3 months correlation between SCORADR110EO and Lyxor is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SCORADR110EO 78769723 and Lyxor 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor 1 and SCORADR110EO 78769723 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 SCORADR110EO 78769723 are associated (or correlated) with Lyxor 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor 1 has no effect on the direction of SCORADR110EO 78769723 i.e., SCORADR110EO 78769723 and Lyxor 1 go up and down completely randomly.

Pair Corralation between SCORADR110EO 78769723 and Lyxor 1

Assuming the 90 days trading horizon SCORADR110EO 78769723 is expected to generate 2.44 times more return on investment than Lyxor 1. However, SCORADR110EO 78769723 is 2.44 times more volatile than Lyxor 1 . It trades about 0.19 of its potential returns per unit of risk. Lyxor 1 is currently generating about 0.14 per unit of risk. If you would invest  184.00  in SCORADR110EO 78769723 on September 13, 2024 and sell it today you would earn a total of  50.00  from holding SCORADR110EO 78769723 or generate 27.17% return on investment over 90 days.

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

SCORADR110EO 78769723  vs.  Lyxor 1

SCORADR110EO 78769723

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SCORADR110EO 78769723 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SCORADR110EO 78769723 reported solid returns over the last few months and may actually be approaching a breakup point.

Lyxor 1

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor 1 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Lyxor 1 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with SCORADR110EO 78769723 and Lyxor 1

The main advantage of trading using opposite SCORADR110EO 78769723 and Lyxor 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCORADR110EO 78769723 position performs unexpectedly, Lyxor 1 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 1 will offset losses from the drop in Lyxor 1's long position.

The idea behind SCORADR110EO 78769723 and Lyxor 1 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 Stocks Directory module to find actively traded stocks across global markets.