Correlation Between Lyxor 1 and Advanced Micro

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

By analyzing existing cross correlation between Lyxor 1 and Advanced Micro Devices, you can compare the effects of market volatilities on Lyxor 1 and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor 1 and Advanced Micro.

Diversification Opportunities for Lyxor 1 and Advanced Micro

0.79

Correlation Coefficient

Lyxor 1  Advanced Micro

Poor diversification

The 3 months correlation between Lyxor and Advanced is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and Advanced Micro go up and down completely randomly.

Pair Corralation between Lyxor 1 and Advanced Micro

Assuming the 90 days trading horizon Lyxor 1 is expected to under-perform the Advanced Micro. But the etf apears to be less risky and, when comparing its historical volatility, Lyxor 1 is 3.37 times less risky than Advanced Micro. The etf trades about -0.08 of its potential returns per unit of risk. The Advanced Micro Devices is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  10,400  in Advanced Micro Devices on April 5, 2025 and sell it today you would earn a total of  1,388  from holding Advanced Micro Devices or generate 13.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Lyxor 1   vs.  Advanced Micro Devices

Lyxor 1

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor 1 are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Lyxor 1 reported solid returns over the last few months and may actually be approaching a breakup point.

Advanced Micro Devices

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Micro Devices are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Advanced Micro reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lyxor 1 and Advanced Micro

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

The idea behind Lyxor 1 and Advanced Micro Devices 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.

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 CEOs Directory module to screen CEOs from public companies around the world.