Correlation Between Lyxor UCITS and 21Shares Ethereum

Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and 21Shares Ethereum 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 Ethereum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lyxor UCITS Stoxx and 21Shares Ethereum Core, you can compare the effects of market volatilities on Lyxor UCITS and 21Shares Ethereum 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 Ethereum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and 21Shares Ethereum.

Diversification Opportunities for Lyxor UCITS and 21Shares Ethereum

-0.55

Correlation Coefficient

Lyxor UCITS  21Shares Ethereum

Excellent diversification

The 3 months correlation between Lyxor and 21Shares is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Stoxx and 21Shares Ethereum Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Ethereum Core 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 Stoxx are associated (or correlated) with 21Shares Ethereum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Ethereum Core has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and 21Shares Ethereum go up and down completely randomly.

Pair Corralation between Lyxor UCITS and 21Shares Ethereum

Assuming the 90 days trading horizon Lyxor UCITS Stoxx is expected to under-perform the 21Shares Ethereum. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor UCITS Stoxx is 5.11 times less risky than 21Shares Ethereum. The etf trades about -0.1 of its potential returns per unit of risk. The 21Shares Ethereum Core is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  900.00  in 21Shares Ethereum Core on September 5, 2024 and sell it today you would earn a total of  415.00  from holding 21Shares Ethereum Core or generate 46.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Lyxor UCITS Stoxx  vs.  21Shares Ethereum Core

Lyxor UCITS Stoxx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lyxor UCITS Stoxx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Lyxor UCITS is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

21Shares Ethereum Core

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Ethereum Core are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, 21Shares Ethereum showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lyxor UCITS and 21Shares Ethereum

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

The idea behind Lyxor UCITS Stoxx and 21Shares Ethereum Core 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.