Correlation Between Lyxor 1 and NEXA RESOURCES

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

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

Diversification Opportunities for Lyxor 1 and NEXA RESOURCES

-0.62

Correlation Coefficient

Lyxor 1  NEXA RESOURCES

Excellent diversification

The 3 months correlation between Lyxor and NEXA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor 1 and NEXA RESOURCES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXA RESOURCES SA 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 NEXA RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXA RESOURCES SA has no effect on the direction of Lyxor 1 i.e., Lyxor 1 and NEXA RESOURCES go up and down completely randomly.

Pair Corralation between Lyxor 1 and NEXA RESOURCES

Assuming the 90 days trading horizon Lyxor 1 is expected to generate 0.33 times more return on investment than NEXA RESOURCES. However, Lyxor 1 is 3.0 times less risky than NEXA RESOURCES. It trades about 0.04 of its potential returns per unit of risk. NEXA RESOURCES SA is currently generating about -0.06 per unit of risk. If you would invest  2,808  in Lyxor 1 on April 20, 2025 and sell it today you would earn a total of  43.00  from holding Lyxor 1 or generate 1.53% return on investment over 90 days.

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

Lyxor 1   vs.  NEXA RESOURCES SA

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.

NEXA RESOURCES SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEXA RESOURCES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Lyxor 1 and NEXA RESOURCES

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

The idea behind Lyxor 1 and NEXA RESOURCES SA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.