Correlation Between Lyxor MSCI and Invesco EURO
Can any of the company-specific risk be diversified away by investing in both Lyxor MSCI and Invesco EURO 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 MSCI and Invesco EURO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor MSCI AC and Invesco EURO STOXX, you can compare the effects of market volatilities on Lyxor MSCI and Invesco EURO 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 MSCI with a short position of Invesco EURO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor MSCI and Invesco EURO.
Diversification Opportunities for Lyxor MSCI and Invesco EURO
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lyxor and Invesco is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor MSCI AC and Invesco EURO STOXX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco EURO STOXX and Lyxor MSCI 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 MSCI AC are associated (or correlated) with Invesco EURO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco EURO STOXX has no effect on the direction of Lyxor MSCI i.e., Lyxor MSCI and Invesco EURO go up and down completely randomly.
Pair Corralation between Lyxor MSCI and Invesco EURO
Assuming the 90 days trading horizon Lyxor MSCI AC is expected to generate 1.0 times more return on investment than Invesco EURO. However, Lyxor MSCI is 1.0 times more volatile than Invesco EURO STOXX. It trades about 0.1 of its potential returns per unit of risk. Invesco EURO STOXX is currently generating about 0.1 per unit of risk. If you would invest 8,590 in Lyxor MSCI AC on September 1, 2025 and sell it today you would earn a total of 513.00 from holding Lyxor MSCI AC or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor MSCI AC vs. Invesco EURO STOXX
Performance |
| Timeline |
| Lyxor MSCI AC |
| Invesco EURO STOXX |
Lyxor MSCI and Invesco EURO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor MSCI and Invesco EURO
The main advantage of trading using opposite Lyxor MSCI and Invesco EURO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor MSCI position performs unexpectedly, Invesco EURO 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 Invesco EURO will offset losses from the drop in Invesco EURO's long position.| Lyxor MSCI vs. UBSFund Solutions MSCI | Lyxor MSCI vs. UBSFund Solutions Bloomberg | Lyxor MSCI vs. UBS ETF MSCI | Lyxor MSCI vs. BB Biotech AG |
| Invesco EURO vs. Invesco AT1 Capital | Invesco EURO vs. Invesco CoinShares Global | Invesco EURO vs. Invesco FTSE RAFI | Invesco EURO vs. Invesco Health Care |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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