Correlation Between Lyxor UCITS and 21Shares Crypto

Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and 21Shares Crypto 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 21Shares Crypto 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 21Shares Crypto Mid Cap, you can compare the effects of market volatilities on Lyxor UCITS and 21Shares Crypto 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 21Shares Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and 21Shares Crypto.

Diversification Opportunities for Lyxor UCITS and 21Shares Crypto

0.63

Correlation Coefficient

Lyxor UCITS  21Shares Crypto

Poor diversification

The 3 months correlation between Lyxor and 21Shares is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and 21Shares Crypto Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Crypto Mid 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 21Shares Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Crypto Mid has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and 21Shares Crypto go up and down completely randomly.

Pair Corralation between Lyxor UCITS and 21Shares Crypto

Assuming the 90 days trading horizon Lyxor UCITS is expected to generate 43.07 times less return on investment than 21Shares Crypto. But when comparing it to its historical volatility, Lyxor UCITS Japan is 4.23 times less risky than 21Shares Crypto. It trades about 0.03 of its potential returns per unit of risk. 21Shares Crypto Mid Cap is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  1,818  in 21Shares Crypto Mid Cap on October 24, 2024 and sell it today you would earn a total of  485.00  from holding 21Shares Crypto Mid Cap or generate 26.68% return on investment over 90 days.

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

Lyxor UCITS Japan  vs.  21Shares Crypto Mid Cap

Lyxor UCITS Japan

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor UCITS Japan are ranked lower than 7 (%) 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.

21Shares Crypto Mid

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Crypto Mid Cap are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 21Shares Crypto sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lyxor UCITS and 21Shares Crypto

The main advantage of trading using opposite Lyxor UCITS and 21Shares Crypto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, 21Shares Crypto 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 21Shares Crypto will offset losses from the drop in 21Shares Crypto's long position.

The idea behind Lyxor UCITS Japan and 21Shares Crypto Mid Cap 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..