Correlation Between Lyxor 1 and Sun Communities

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

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

Diversification Opportunities for Lyxor 1 and Sun Communities

0.0

Correlation Coefficient

Lyxor 1  Sun Communities

Pay attention - limited upside

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

Pair Corralation between Lyxor 1 and Sun Communities

If you would invest  2,488  in Lyxor 1 on April 17, 2025 and sell it today you would earn a total of  343.00  from holding Lyxor 1 or generate 13.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Lyxor 1   vs.  Sun Communities

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.

Sun Communities

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Lyxor 1 and Sun Communities

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

The idea behind Lyxor 1 and Sun Communities 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.