Correlation Between Lyxor Green and NYSE Composite
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By analyzing existing cross correlation between Lyxor Green Bond and NYSE Composite, you can compare the effects of market volatilities on Lyxor Green and NYSE Composite 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 Green with a short position of NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor Green and NYSE Composite.
Diversification Opportunities for Lyxor Green and NYSE Composite
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lyxor and NYSE is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor Green Bond and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Lyxor Green 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 Green Bond are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Lyxor Green i.e., Lyxor Green and NYSE Composite go up and down completely randomly.
Pair Corralation between Lyxor Green and NYSE Composite
Assuming the 90 days trading horizon Lyxor Green is expected to generate 1.58 times less return on investment than NYSE Composite. But when comparing it to its historical volatility, Lyxor Green Bond is 1.5 times less risky than NYSE Composite. It trades about 0.03 of its potential returns per unit of risk. NYSE Composite is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,525,982 in NYSE Composite on February 5, 2024 and sell it today you would earn a total of 253,807 from holding NYSE Composite or generate 16.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 69.56% |
Values | Daily Returns |
Lyxor Green Bond vs. NYSE Composite
Performance |
Timeline |
Lyxor Green and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Lyxor Green Bond
Pair trading matchups for Lyxor Green
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Lyxor Green and NYSE Composite
The main advantage of trading using opposite Lyxor Green and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor Green position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.The idea behind Lyxor Green Bond and NYSE Composite 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.NYSE Composite vs. Bridgford Foods | NYSE Composite vs. SunOpta | NYSE Composite vs. Where Food Comes | NYSE Composite vs. Sligro Food Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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