Correlation Between Applied Materials, and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Applied Materials, 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 Applied Materials, and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Materials, and Lloyds Banking Group, you can compare the effects of market volatilities on Applied Materials, 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 Applied Materials, with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Materials, and Lloyds Banking.
Diversification Opportunities for Applied Materials, and Lloyds Banking
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Applied and Lloyds is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Applied Materials, 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 Applied Materials, 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 Applied Materials, 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 Applied Materials, i.e., Applied Materials, and Lloyds Banking go up and down completely randomly.
Pair Corralation between Applied Materials, and Lloyds Banking
Assuming the 90 days trading horizon Applied Materials, is expected to generate 1.29 times more return on investment than Lloyds Banking. However, Applied Materials, is 1.29 times more volatile than Lloyds Banking Group. It trades about 0.07 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.08 per unit of risk. If you would invest 10,322 in Applied Materials, on October 26, 2024 and sell it today you would earn a total of 912.00 from holding Applied Materials, or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Materials, vs. Lloyds Banking Group
Performance |
| Timeline |
| Applied Materials, |
| Lloyds Banking Group |
Applied Materials, and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Materials, and Lloyds Banking
The main advantage of trading using opposite Applied Materials, and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Materials, 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.| Applied Materials, vs. Alaska Air Group, | Applied Materials, vs. Zoom Video Communications | Applied Materials, vs. Telecomunicaes Brasileiras SA | Applied Materials, vs. Marfrig Global Foods |
| Lloyds Banking vs. Deutsche Bank Aktiengesellschaft | Lloyds Banking vs. Zebra Technologies | Lloyds Banking vs. HDFC Bank Limited | Lloyds Banking vs. SVB Financial Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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