Correlation Between Lyxor UCITS and EasyETF BNP

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

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

Diversification Opportunities for Lyxor UCITS and EasyETF BNP

0.37

Correlation Coefficient

Lyxor UCITS  EasyETF BNP

Weak diversification

The 3 months correlation between Lyxor and EasyETF is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and EasyETF BNP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EasyETF BNP and Lyxor UCITS 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 UCITS Japan are associated (or correlated) with EasyETF BNP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EasyETF BNP has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and EasyETF BNP go up and down completely randomly.

Pair Corralation between Lyxor UCITS and EasyETF BNP

Assuming the 90 days trading horizon Lyxor UCITS Japan is expected to generate 0.89 times more return on investment than EasyETF BNP. However, Lyxor UCITS Japan is 1.12 times less risky than EasyETF BNP. It trades about 0.07 of its potential returns per unit of risk. EasyETF BNP is currently generating about -0.13 per unit of risk. If you would invest  16,133  in Lyxor UCITS Japan on December 21, 2024 and sell it today you would earn a total of  601.00  from holding Lyxor UCITS Japan or generate 3.73% return on investment over 90 days.

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

Lyxor UCITS Japan  vs.  EasyETF BNP

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. Despite somewhat strong basic indicators, Lyxor UCITS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

EasyETF BNP

Risk-Adjusted Performance

Very Weak

Over the last 90 days EasyETF BNP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Lyxor UCITS and EasyETF BNP

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

The idea behind Lyxor UCITS Japan and EasyETF BNP 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..