Correlation Between Lyxor 1 and APARTMINV MGMT

Can any of the company-specific risk be diversified away by investing in both Lyxor 1 and APARTMINV MGMT 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 1 and APARTMINV MGMT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lyxor 1 and APARTMINV MGMT A, you can compare the effects of market volatilities on Lyxor 1 and APARTMINV MGMT 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 1 with a short position of APARTMINV MGMT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and APARTMINV MGMT.

Diversification Opportunities for Lyxor 1 and APARTMINV MGMT

-0.51

Correlation Coefficient

Lyxor 1  APARTMINV MGMT

Excellent diversification

The 3 months correlation between Lyxor and APARTMINV is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and APARTMINV MGMT A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APARTMINV MGMT A and Lyxor 1 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 1 are associated (or correlated) with APARTMINV MGMT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APARTMINV MGMT A has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and APARTMINV MGMT go up and down completely randomly.

Pair Corralation between Lyxor 1 and APARTMINV MGMT

Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.58 times more return on investment than APARTMINV MGMT. However, Lyxor 1 is 1.74 times less risky than APARTMINV MGMT. It trades about 0.01 of its potential returns per unit of risk. APARTMINV MGMT A is currently generating about 0.0 per unit of risk. If you would invest  2,465  in Lyxor 1 on February 15, 2024 and sell it today you would earn a total of  48.00  from holding Lyxor 1 or generate 1.95% return on investment over 90 days.

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

Lyxor 1   vs.  APARTMINV MGMT A

Lyxor 1

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Lyxor 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lyxor 1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

APARTMINV MGMT A

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in APARTMINV MGMT A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, APARTMINV MGMT may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Lyxor 1 and APARTMINV MGMT

The main advantage of trading using opposite Lyxor 1 and APARTMINV MGMT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor 1 position performs unexpectedly, APARTMINV MGMT 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 APARTMINV MGMT will offset losses from the drop in APARTMINV MGMT's long position.

The idea behind Lyxor 1 and APARTMINV MGMT A 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.