Correlation Between Lyxor BEL and Immobiliere Distri

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

By analyzing existing cross correlation between Lyxor BEL 20 and Immobiliere Distri Land NV, you can compare the effects of market volatilities on Lyxor BEL and Immobiliere Distri 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 BEL with a short position of Immobiliere Distri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor BEL and Immobiliere Distri.

Diversification Opportunities for Lyxor BEL and Immobiliere Distri

0.35

Correlation Coefficient

Lyxor BEL  Immobiliere Distri

Weak diversification

The 3 months correlation between Lyxor and Immobiliere is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor BEL 20 and Immobiliere Distri Land NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobiliere Distri Land and Lyxor BEL 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 BEL 20 are associated (or correlated) with Immobiliere Distri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobiliere Distri Land has no effect on the direction of Lyxor BEL i.e., Lyxor BEL and Immobiliere Distri go up and down completely randomly.

Pair Corralation between Lyxor BEL and Immobiliere Distri

Assuming the 90 days trading horizon Lyxor BEL 20 is expected to generate 0.49 times more return on investment than Immobiliere Distri. However, Lyxor BEL 20 is 2.05 times less risky than Immobiliere Distri. It trades about 0.04 of its potential returns per unit of risk. Immobiliere Distri Land NV is currently generating about -0.11 per unit of risk. If you would invest  6,181  in Lyxor BEL 20 on September 3, 2024 and sell it today you would earn a total of  110.00  from holding Lyxor BEL 20 or generate 1.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Lyxor BEL 20  vs.  Immobiliere Distri Land NV

Lyxor BEL 20

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor BEL 20 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Lyxor BEL is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Immobiliere Distri Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immobiliere Distri Land NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Pair Trading with Lyxor BEL and Immobiliere Distri

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

The idea behind Lyxor BEL 20 and Immobiliere Distri Land NV 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.