Correlation Between Seche Environnement and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Seche Environnement 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 Seche Environnement and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnement SA and Lloyds Banking Group, you can compare the effects of market volatilities on Seche Environnement 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 Seche Environnement with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and Lloyds Banking.
Diversification Opportunities for Seche Environnement and Lloyds Banking
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seche and Lloyds is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA 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 Seche Environnement 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 Seche Environnement SA 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 Seche Environnement i.e., Seche Environnement and Lloyds Banking go up and down completely randomly.
Pair Corralation between Seche Environnement and Lloyds Banking
Assuming the 90 days trading horizon Seche Environnement SA is expected to under-perform the Lloyds Banking. In addition to that, Seche Environnement is 5.16 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 0.15 per unit of volatility. If you would invest 12,291 in Lloyds Banking Group on September 14, 2024 and sell it today you would earn a total of 1,959 from holding Lloyds Banking Group or generate 15.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Seche Environnement SA vs. Lloyds Banking Group
Performance |
| Timeline |
| Seche Environnement |
| Lloyds Banking Group |
Seche Environnement and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and Lloyds Banking
The main advantage of trading using opposite Seche Environnement and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement 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.| Seche Environnement vs. Abingdon Health Plc | Seche Environnement vs. Sabre Insurance Group | Seche Environnement vs. Cardinal Health | Seche Environnement vs. Eco Animal Health |
| Lloyds Banking vs. Liontrust Asset Management | Lloyds Banking vs. Erste Group Bank | Lloyds Banking vs. Smithson Investment Trust | Lloyds Banking vs. Aberdeen Diversified Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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