Correlation Between Lyxor Commodities and Amundi MSCI

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

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

Diversification Opportunities for Lyxor Commodities and Amundi MSCI

0.01

Correlation Coefficient

Lyxor Commodities  Amundi MSCI

Significant diversification

The 3 months correlation between Lyxor and Amundi is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Commodities RefinitivCor and Amundi MSCI World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi MSCI World and Lyxor Commodities 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 Commodities RefinitivCoreCommodity are associated (or correlated) with Amundi MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi MSCI World has no effect on the direction of Lyxor Commodities i.e., Lyxor Commodities and Amundi MSCI go up and down completely randomly.

Pair Corralation between Lyxor Commodities and Amundi MSCI

Assuming the 90 days trading horizon Lyxor Commodities RefinitivCoreCommodity is expected to generate 0.67 times more return on investment than Amundi MSCI. However, Lyxor Commodities RefinitivCoreCommodity is 1.5 times less risky than Amundi MSCI. It trades about 0.08 of its potential returns per unit of risk. Amundi MSCI World is currently generating about -0.14 per unit of risk. If you would invest  2,324  in Lyxor Commodities RefinitivCoreCommodity on December 22, 2024 and sell it today you would earn a total of  120.00  from holding Lyxor Commodities RefinitivCoreCommodity or generate 5.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Lyxor Commodities RefinitivCor  vs.  Amundi MSCI World

Lyxor Commodities

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor Commodities RefinitivCoreCommodity are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Lyxor Commodities is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amundi MSCI World

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amundi MSCI World has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Lyxor Commodities and Amundi MSCI

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

The idea behind Lyxor Commodities RefinitivCoreCommodity and Amundi MSCI World 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 CEOs Directory module to screen CEOs from public companies around the world.