Correlation Between SANOK RUBBER and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER 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 SANOK RUBBER and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOK RUBBER ZY and Lloyds Banking Group, you can compare the effects of market volatilities on SANOK RUBBER 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 SANOK RUBBER with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and Lloyds Banking.
Diversification Opportunities for SANOK RUBBER and Lloyds Banking
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SANOK and Lloyds is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY 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 SANOK RUBBER 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 SANOK RUBBER ZY 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 SANOK RUBBER i.e., SANOK RUBBER and Lloyds Banking go up and down completely randomly.
Pair Corralation between SANOK RUBBER and Lloyds Banking
Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 0.7 times more return on investment than Lloyds Banking. However, SANOK RUBBER ZY is 1.42 times less risky than Lloyds Banking. It trades about 0.3 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.05 per unit of risk. If you would invest 443.00 in SANOK RUBBER ZY on September 28, 2024 and sell it today you would earn a total of 33.00 from holding SANOK RUBBER ZY or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANOK RUBBER ZY vs. Lloyds Banking Group
Performance |
| Timeline |
| SANOK RUBBER ZY |
| Lloyds Banking Group |
SANOK RUBBER and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOK RUBBER and Lloyds Banking
The main advantage of trading using opposite SANOK RUBBER and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER 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.| SANOK RUBBER vs. Dno ASA | SANOK RUBBER vs. DENSO P ADR | SANOK RUBBER vs. Aptiv PLC | SANOK RUBBER vs. PT Astra International |
| Lloyds Banking vs. BNP PARIBAS ADR | Lloyds Banking vs. Intesa Sanpaolo SpA | Lloyds Banking vs. Lloyds Banking Group | Lloyds Banking vs. UniCredit SpA |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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