Correlation Between Lyxor UCITS and Lyxor PEA

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

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

Diversification Opportunities for Lyxor UCITS and Lyxor PEA

0.0

Correlation Coefficient

Lyxor UCITS  Lyxor PEA

Pay attention - limited upside

The 3 months correlation between Lyxor and Lyxor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS MSCI and Lyxor PEA Euro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor PEA Euro 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 MSCI are associated (or correlated) with Lyxor PEA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor PEA Euro has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and Lyxor PEA go up and down completely randomly.

Pair Corralation between Lyxor UCITS and Lyxor PEA

If you would invest (100.00) in Lyxor PEA Euro on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Lyxor PEA Euro or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lyxor UCITS MSCI  vs.  Lyxor PEA Euro

Lyxor UCITS MSCI

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lyxor UCITS MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Lyxor UCITS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lyxor PEA Euro

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lyxor PEA Euro has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Lyxor PEA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lyxor UCITS and Lyxor PEA

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

The idea behind Lyxor UCITS MSCI and Lyxor PEA Euro 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.