Correlation Between Lyxor 1 and Covivio SA

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

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

Diversification Opportunities for Lyxor 1 and Covivio SA

0.0

Correlation Coefficient

Lyxor 1  Covivio SA

Pay attention - limited upside

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

Pair Corralation between Lyxor 1 and Covivio SA

If you would invest  2,473  in Lyxor 1 on October 23, 2024 and sell it today you would earn a total of  142.00  from holding Lyxor 1 or generate 5.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Lyxor 1   vs.  Covivio SA

Lyxor 1

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor 1 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Lyxor 1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Covivio SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Lyxor 1 and Covivio SA

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

The idea behind Lyxor 1 and Covivio SA 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.

Check out your portfolio center.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.