Correlation Between AMG Advanced and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Lloyds Banking 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 AMG Advanced and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Lloyds Banking Group, you can compare the effects of market volatilities on AMG Advanced and Lloyds Banking 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 AMG Advanced with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Lloyds Banking.
Diversification Opportunities for AMG Advanced and Lloyds Banking
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMG and Lloyds is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Lloyds Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Banking Group and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Lloyds Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Banking Group has no effect on the direction of AMG Advanced i.e., AMG Advanced and Lloyds Banking go up and down completely randomly.
Pair Corralation between AMG Advanced and Lloyds Banking
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Lloyds Banking. In addition to that, AMG Advanced is 5.53 times more volatile than Lloyds Banking Group. It trades about -0.05 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.05 per unit of volatility. If you would invest 12,484 in Lloyds Banking Group on October 16, 2024 and sell it today you would earn a total of 1,491 from holding Lloyds Banking Group or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Lloyds Banking Group
Performance |
| Timeline |
| AMG Advanced Metallu |
| Lloyds Banking Group |
AMG Advanced and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Lloyds Banking
The main advantage of trading using opposite AMG Advanced and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Lloyds Banking 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 Lloyds Banking will offset losses from the drop in Lloyds Banking's long position.| AMG Advanced vs. GlobalData PLC | AMG Advanced vs. Chrysalis Investments | AMG Advanced vs. New Residential Investment | AMG Advanced vs. Arrow Electronics |
| Lloyds Banking vs. Norwegian Air Shuttle | Lloyds Banking vs. Pentair PLC | Lloyds Banking vs. AMG Advanced Metallurgical | Lloyds Banking vs. BW Offshore |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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