Correlation Between LYXOR EURO and LYXOR EURO

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

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

Diversification Opportunities for LYXOR EURO and LYXOR EURO

0.98

Correlation Coefficient

LYXOR EURO  LYXOR EURO

Almost no diversification

The 3 months correlation between LYXOR and LYXOR is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding LYXOR EURO STOXX and LYXOR EURO STOXX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYXOR EURO STOXX and LYXOR EURO 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 EURO STOXX are associated (or correlated) with LYXOR EURO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYXOR EURO STOXX has no effect on the direction of LYXOR EURO i.e., LYXOR EURO and LYXOR EURO go up and down completely randomly.

Pair Corralation between LYXOR EURO and LYXOR EURO

Assuming the 90 days trading horizon LYXOR EURO STOXX is expected to generate 1.06 times more return on investment than LYXOR EURO. However, LYXOR EURO is 1.06 times more volatile than LYXOR EURO STOXX. It trades about -0.13 of its potential returns per unit of risk. LYXOR EURO STOXX is currently generating about -0.15 per unit of risk. If you would invest  78.00  in LYXOR EURO STOXX on December 30, 2024 and sell it today you would lose (13.00) from holding LYXOR EURO STOXX or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

LYXOR EURO STOXX  vs.  LYXOR EURO STOXX

LYXOR EURO STOXX

Risk-Adjusted Performance

Very Weak

Over the last 90 days LYXOR EURO STOXX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Etf's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

LYXOR EURO STOXX

Risk-Adjusted Performance

Very Weak

Over the last 90 days LYXOR EURO STOXX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Etf's forward-looking signals remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Pair Trading with LYXOR EURO and LYXOR EURO

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

The idea behind LYXOR EURO STOXX and LYXOR EURO STOXX 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.