Correlation Between Xtrackers and Lyxor BofAML
Can any of the company-specific risk be diversified away by investing in both Xtrackers and Lyxor BofAML 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 Xtrackers and Lyxor BofAML into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers II and Lyxor BofAML USD, you can compare the effects of market volatilities on Xtrackers and Lyxor BofAML 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 Xtrackers with a short position of Lyxor BofAML. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and Lyxor BofAML.
Diversification Opportunities for Xtrackers and Lyxor BofAML
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtrackers and Lyxor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II and Lyxor BofAML USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor BofAML USD and Xtrackers 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 Xtrackers II are associated (or correlated) with Lyxor BofAML. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor BofAML USD has no effect on the direction of Xtrackers i.e., Xtrackers and Lyxor BofAML go up and down completely randomly.
Pair Corralation between Xtrackers and Lyxor BofAML
Assuming the 90 days trading horizon Xtrackers II is expected to under-perform the Lyxor BofAML. In addition to that, Xtrackers is 2.59 times more volatile than Lyxor BofAML USD. It trades about -0.06 of its total potential returns per unit of risk. Lyxor BofAML USD is currently generating about 0.04 per unit of volatility. If you would invest 7,365 in Lyxor BofAML USD on December 30, 2024 and sell it today you would earn a total of 57.00 from holding Lyxor BofAML USD or generate 0.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Xtrackers II vs. Lyxor BofAML USD
Performance |
Timeline |
Xtrackers II |
Lyxor BofAML USD |
Xtrackers and Lyxor BofAML Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers and Lyxor BofAML
The main advantage of trading using opposite Xtrackers and Lyxor BofAML positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, Lyxor BofAML 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 BofAML will offset losses from the drop in Lyxor BofAML's long position.Xtrackers vs. Xtrackers II Global | Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI |
Lyxor BofAML vs. Lyxor Fed Funds | Lyxor BofAML vs. Lyxor Index Fund | Lyxor BofAML vs. Lyxor 1 TecDAX | Lyxor BofAML vs. Lyxor Index Fund |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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