Correlation Between IShares VII and Lyxor Index
Can any of the company-specific risk be diversified away by investing in both IShares VII and Lyxor 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 IShares VII and Lyxor Index into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares VII PLC and Lyxor Index Fund, you can compare the effects of market volatilities on IShares VII and Lyxor 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 IShares VII with a short position of Lyxor Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares VII and Lyxor Index.
Diversification Opportunities for IShares VII and Lyxor Index
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Lyxor is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII PLC and Lyxor Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Index Fund and IShares VII 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 iShares VII PLC are associated (or correlated) with Lyxor Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Index Fund has no effect on the direction of IShares VII i.e., IShares VII and Lyxor Index go up and down completely randomly.
Pair Corralation between IShares VII and Lyxor Index
Assuming the 90 days trading horizon iShares VII PLC is expected to under-perform the Lyxor Index. But the etf apears to be less risky and, when comparing its historical volatility, iShares VII PLC is 1.82 times less risky than Lyxor Index. The etf trades about -0.08 of its potential returns per unit of risk. The Lyxor Index Fund is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11,862 in Lyxor Index Fund on December 29, 2024 and sell it today you would lose (4.00) from holding Lyxor Index Fund or give up 0.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
iShares VII PLC vs. Lyxor Index Fund
Performance |
Timeline |
iShares VII PLC |
Lyxor Index Fund |
IShares VII and Lyxor Index Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares VII and Lyxor Index
The main advantage of trading using opposite IShares VII and Lyxor Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares VII position performs unexpectedly, Lyxor 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 Lyxor Index will offset losses from the drop in Lyxor Index's long position.IShares VII vs. iShares Govt Bond | IShares VII vs. iShares Global AAA AA | IShares VII vs. iShares Smart City | IShares VII vs. iShares Broad High |
Lyxor Index vs. iShares Global Clean | Lyxor Index vs. Superior Plus Corp | Lyxor Index vs. Origin Agritech | Lyxor Index vs. Identiv |
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
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum |