Correlation Between Media Investment and Lyxor UCITS

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

By analyzing existing cross correlation between Media Investment Optimization and Lyxor UCITS Ibex35, you can compare the effects of market volatilities on Media Investment and Lyxor UCITS 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 Media Investment with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Investment and Lyxor UCITS.

Diversification Opportunities for Media Investment and Lyxor UCITS

-0.14

Correlation Coefficient

Media Investment  Lyxor UCITS

Good diversification

The 3 months correlation between Media and Lyxor is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Media Investment Optimization and Lyxor UCITS Ibex35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Ibex35 and Media Investment 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 Media Investment Optimization are associated (or correlated) with Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS Ibex35 has no effect on the direction of Media Investment i.e., Media Investment and Lyxor UCITS go up and down completely randomly.

Pair Corralation between Media Investment and Lyxor UCITS

Assuming the 90 days trading horizon Media Investment Optimization is expected to under-perform the Lyxor UCITS. In addition to that, Media Investment is 4.58 times more volatile than Lyxor UCITS Ibex35. It trades about -0.01 of its total potential returns per unit of risk. Lyxor UCITS Ibex35 is currently generating about 0.1 per unit of volatility. If you would invest  7,930  in Lyxor UCITS Ibex35 on September 3, 2024 and sell it today you would earn a total of  4,190  from holding Lyxor UCITS Ibex35 or generate 52.84% return on investment over 90 days.

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

Media Investment Optimization  vs.  Lyxor UCITS Ibex35

Media Investment Opt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Media Investment Optimization has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Lyxor UCITS Ibex35

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor UCITS Ibex35 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Lyxor UCITS is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Media Investment and Lyxor UCITS

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

The idea behind Media Investment Optimization and Lyxor UCITS Ibex35 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.