Correlation Between LS 1x and Lyxor UCITS

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

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

Diversification Opportunities for LS 1x and Lyxor UCITS

-0.54

Correlation Coefficient

LS 1x  Lyxor UCITS

Excellent diversification

The 3 months correlation between 1AMZ and Lyxor is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding LS 1x Amazon and Lyxor UCITS Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Japan and LS 1x 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 LS 1x Amazon are associated (or correlated) with Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS Japan has no effect on the direction of LS 1x i.e., LS 1x and Lyxor UCITS go up and down completely randomly.

Pair Corralation between LS 1x and Lyxor UCITS

Assuming the 90 days trading horizon LS 1x Amazon is expected to under-perform the Lyxor UCITS. In addition to that, LS 1x is 2.09 times more volatile than Lyxor UCITS Japan. It trades about -0.09 of its total potential returns per unit of risk. Lyxor UCITS Japan is currently generating about 0.07 per unit of volatility. If you would invest  16,999  in Lyxor UCITS Japan on December 30, 2024 and sell it today you would earn a total of  687.00  from holding Lyxor UCITS Japan or generate 4.04% return on investment over 90 days.

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

LS 1x Amazon  vs.  Lyxor UCITS Japan

LS 1x Amazon

Risk-Adjusted Performance

Very Weak

Over the last 90 days LS 1x Amazon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Lyxor UCITS Japan

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor UCITS Japan are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Lyxor UCITS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with LS 1x and Lyxor UCITS

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

The idea behind LS 1x Amazon and Lyxor UCITS Japan 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.