Correlation Between Banco Bradesco and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco 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 Banco Bradesco and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Bradesco SA and Lloyds Banking Group, you can compare the effects of market volatilities on Banco Bradesco 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 Banco Bradesco with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Lloyds Banking.
Diversification Opportunities for Banco Bradesco and Lloyds Banking
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Banco and Lloyds is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco 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 Banco Bradesco 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 Banco Bradesco 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 Banco Bradesco i.e., Banco Bradesco and Lloyds Banking go up and down completely randomly.
Pair Corralation between Banco Bradesco and Lloyds Banking
Given the investment horizon of 90 days Banco Bradesco is expected to generate 1.24 times less return on investment than Lloyds Banking. But when comparing it to its historical volatility, Banco Bradesco SA is 1.69 times less risky than Lloyds Banking. It trades about 0.33 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 271.00 in Lloyds Banking Group on October 23, 2024 and sell it today you would earn a total of 31.00 from holding Lloyds Banking Group or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Lloyds Banking Group
Performance |
| Timeline |
| Banco Bradesco SA |
| Lloyds Banking Group |
Banco Bradesco and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Lloyds Banking
The main advantage of trading using opposite Banco Bradesco and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco 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.| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
| Lloyds Banking vs. Itau Unibanco Banco | Lloyds Banking vs. Grupo Financiero Galicia | Lloyds Banking vs. Banco Macro SA | Lloyds Banking vs. Banco Santander Brasil |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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