Correlation Between Naturhouse Health and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Naturhouse Health 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 Naturhouse Health and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naturhouse Health SA and Lloyds Banking Group, you can compare the effects of market volatilities on Naturhouse Health 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 Naturhouse Health with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturhouse Health and Lloyds Banking.
Diversification Opportunities for Naturhouse Health and Lloyds Banking
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Naturhouse and Lloyds is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Naturhouse Health 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 Naturhouse Health 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 Naturhouse Health 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 Naturhouse Health i.e., Naturhouse Health and Lloyds Banking go up and down completely randomly.
Pair Corralation between Naturhouse Health and Lloyds Banking
Assuming the 90 days trading horizon Naturhouse Health SA is expected to generate 0.61 times more return on investment than Lloyds Banking. However, Naturhouse Health SA is 1.63 times less risky than Lloyds Banking. It trades about -0.01 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about -0.1 per unit of risk. If you would invest 169.00 in Naturhouse Health SA on September 3, 2024 and sell it today you would lose (1.00) from holding Naturhouse Health SA or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naturhouse Health SA vs. Lloyds Banking Group
Performance |
| Timeline |
| Naturhouse Health |
| Lloyds Banking Group |
Naturhouse Health and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturhouse Health and Lloyds Banking
The main advantage of trading using opposite Naturhouse Health and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturhouse Health 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.| Naturhouse Health vs. Beeks Trading | Naturhouse Health vs. Kinnevik Investment AB | Naturhouse Health vs. Mindflair Plc | Naturhouse Health vs. Amedeo Air Four |
| Lloyds Banking vs. Alior Bank SA | Lloyds Banking vs. AcadeMedia AB | Lloyds Banking vs. Intermediate Capital Group | Lloyds Banking vs. Liberty Media Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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