Correlation Between Lyxor UCITS and Amundi Index

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and Amundi Index 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 Amundi Index 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 Amundi Index Solutions, you can compare the effects of market volatilities on Lyxor UCITS and Amundi Index 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 Amundi Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and Amundi Index.

Diversification Opportunities for Lyxor UCITS and Amundi Index

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Lyxor and Amundi is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Japan and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions 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 Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Amundi Index go up and down completely randomly.

Pair Corralation between Lyxor UCITS and Amundi Index

Assuming the 90 days trading horizon Lyxor UCITS Japan is expected to generate 0.3 times more return on investment than Amundi Index. However, Lyxor UCITS Japan is 3.37 times less risky than Amundi Index. It trades about 0.14 of its potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.01 per unit of risk. If you would invest  21,599  in Lyxor UCITS Japan on September 13, 2024 and sell it today you would earn a total of  556.00  from holding Lyxor UCITS Japan or generate 2.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Lyxor UCITS Japan  vs.  Amundi Index Solutions

 Performance 
       Timeline  
Lyxor UCITS Japan 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor UCITS Japan are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lyxor UCITS may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Amundi Index Solutions 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Amundi Index sustained solid returns over the last few months and may actually be approaching a breakup point.

Lyxor UCITS and Amundi Index Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lyxor UCITS and Amundi Index

The main advantage of trading using opposite Lyxor UCITS and Amundi Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, Amundi Index 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 Index will offset losses from the drop in Amundi Index's long position.
The idea behind Lyxor UCITS Japan and Amundi Index Solutions 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios