Correlation Between Batm Advanced and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Batm Advanced 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 Batm Advanced and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and Lloyds Banking Group, you can compare the effects of market volatilities on Batm Advanced 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 Batm Advanced with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Lloyds Banking.
Diversification Opportunities for Batm Advanced and Lloyds Banking
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Batm and Lloyds is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications 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 Batm Advanced 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 Batm Advanced Communications 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 Batm Advanced i.e., Batm Advanced and Lloyds Banking go up and down completely randomly.
Pair Corralation between Batm Advanced and Lloyds Banking
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Lloyds Banking. In addition to that, Batm Advanced is 15.83 times more volatile than Lloyds Banking Group. It trades about -0.16 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about -0.03 per unit of volatility. If you would invest 13,990 in Lloyds Banking Group on September 2, 2024 and sell it today you would lose (15.00) from holding Lloyds Banking Group or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Lloyds Banking Group
Performance |
| Timeline |
| Batm Advanced Commun |
| Lloyds Banking Group |
Batm Advanced and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Lloyds Banking
The main advantage of trading using opposite Batm Advanced and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced 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.| Batm Advanced vs. Alaska Air Group | Batm Advanced vs. Delta Air Lines | Batm Advanced vs. Silvercorp Metals | Batm Advanced vs. Greenroc Mining PLC |
| Lloyds Banking vs. British American Tobacco | Lloyds Banking vs. Batm Advanced Communications | Lloyds Banking vs. Regions Financial Corp | Lloyds Banking vs. Sparebank 1 SR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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