Correlation Between LYXOR DAILY and HANetf ICAV

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

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

Diversification Opportunities for LYXOR DAILY and HANetf ICAV

-0.73

Correlation Coefficient

LYXOR DAILY  HANetf ICAV

Pay attention - limited upside

The 3 months correlation between LYXOR and HANetf is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding LYXOR DAILY SHORTDAX and HANetf ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANetf ICAV and LYXOR DAILY 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 DAILY SHORTDAX are associated (or correlated) with HANetf ICAV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANetf ICAV has no effect on the direction of LYXOR DAILY i.e., LYXOR DAILY and HANetf ICAV go up and down completely randomly.

Pair Corralation between LYXOR DAILY and HANetf ICAV

Assuming the 90 days trading horizon LYXOR DAILY SHORTDAX is expected to under-perform the HANetf ICAV. But the etf apears to be less risky and, when comparing its historical volatility, LYXOR DAILY SHORTDAX is 1.29 times less risky than HANetf ICAV. The etf trades about -0.15 of its potential returns per unit of risk. The HANetf ICAV is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,338  in HANetf ICAV on September 23, 2024 and sell it today you would earn a total of  82.00  from holding HANetf ICAV or generate 6.13% return on investment over 90 days.

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

LYXOR DAILY SHORTDAX  vs.  HANetf ICAV

LYXOR DAILY SHORTDAX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LYXOR DAILY SHORTDAX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

HANetf ICAV

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HANetf ICAV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, HANetf ICAV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LYXOR DAILY and HANetf ICAV

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

The idea behind LYXOR DAILY SHORTDAX and HANetf ICAV 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.