Correlation Between Lyxor 1 and Expat Slovenia

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

By analyzing existing cross correlation between Lyxor 1 and Expat Slovenia SBI, you can compare the effects of market volatilities on Lyxor 1 and Expat Slovenia 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 Expat Slovenia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Expat Slovenia.

Diversification Opportunities for Lyxor 1 and Expat Slovenia

0.94

Correlation Coefficient

Lyxor 1  Expat Slovenia

Almost no diversification

The 3 months correlation between Lyxor and Expat is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Expat Slovenia SBI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Slovenia SBI 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 Expat Slovenia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Slovenia SBI has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Expat Slovenia go up and down completely randomly.

Pair Corralation between Lyxor 1 and Expat Slovenia

Assuming the 90 days trading horizon Lyxor 1 is expected to generate 2.41 times less return on investment than Expat Slovenia. But when comparing it to its historical volatility, Lyxor 1 is 1.35 times less risky than Expat Slovenia. It trades about 0.14 of its potential returns per unit of risk. Expat Slovenia SBI is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  179.00  in Expat Slovenia SBI on December 28, 2024 and sell it today you would earn a total of  41.00  from holding Expat Slovenia SBI or generate 22.91% return on investment over 90 days.

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

Lyxor 1   vs.  Expat Slovenia SBI

Lyxor 1

Risk-Adjusted Performance

OK

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 April 2025.

Expat Slovenia SBI

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Expat Slovenia SBI are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Expat Slovenia exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lyxor 1 and Expat Slovenia

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

The idea behind Lyxor 1 and Expat Slovenia SBI 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.