Correlation Between CEMEX SAB and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both CEMEX SAB 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 CEMEX SAB and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEMEX SAB de and Lloyds Banking Group, you can compare the effects of market volatilities on CEMEX SAB 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 CEMEX SAB with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEMEX SAB and Lloyds Banking.
Diversification Opportunities for CEMEX SAB and Lloyds Banking
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CEMEX and Lloyds is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding CEMEX SAB de 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 CEMEX SAB 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 CEMEX SAB de 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 CEMEX SAB i.e., CEMEX SAB and Lloyds Banking go up and down completely randomly.
Pair Corralation between CEMEX SAB and Lloyds Banking
Assuming the 90 days horizon CEMEX SAB de is expected to under-perform the Lloyds Banking. In addition to that, CEMEX SAB is 1.24 times more volatile than Lloyds Banking Group. It trades about -0.08 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about -0.02 per unit of volatility. If you would invest 67.00 in Lloyds Banking Group on September 3, 2024 and sell it today you would lose (1.00) from holding Lloyds Banking Group or give up 1.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEMEX SAB de vs. Lloyds Banking Group
Performance |
| Timeline |
| CEMEX SAB de |
| Lloyds Banking Group |
CEMEX SAB and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEMEX SAB and Lloyds Banking
The main advantage of trading using opposite CEMEX SAB and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEMEX SAB 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.| CEMEX SAB vs. Vulcan Materials | CEMEX SAB vs. Martin Marietta Materials | CEMEX SAB vs. Eagle Materials | CEMEX SAB vs. CRH PLC ADR |
| Lloyds Banking vs. First Hawaiian | Lloyds Banking vs. Central Pacific Financial | Lloyds Banking vs. Territorial Bancorp | Lloyds Banking vs. Comerica |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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