Correlation Between AECOM TECHNOLOGY and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both AECOM TECHNOLOGY 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 AECOM TECHNOLOGY and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM TECHNOLOGY and Lloyds Banking Group, you can compare the effects of market volatilities on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and Lloyds Banking.
Diversification Opportunities for AECOM TECHNOLOGY and Lloyds Banking
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AECOM and Lloyds is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and Lloyds Banking go up and down completely randomly.
Pair Corralation between AECOM TECHNOLOGY and Lloyds Banking
Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to generate 0.66 times more return on investment than Lloyds Banking. However, AECOM TECHNOLOGY is 1.52 times less risky than Lloyds Banking. It trades about 0.05 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.03 per unit of risk. If you would invest 7,794 in AECOM TECHNOLOGY on October 13, 2024 and sell it today you would earn a total of 2,606 from holding AECOM TECHNOLOGY or generate 33.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AECOM TECHNOLOGY vs. Lloyds Banking Group
Performance |
| Timeline |
| AECOM TECHNOLOGY |
| Lloyds Banking Group |
AECOM TECHNOLOGY and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM TECHNOLOGY and Lloyds Banking
The main advantage of trading using opposite AECOM TECHNOLOGY and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY 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.| AECOM TECHNOLOGY vs. Austevoll Seafood ASA | AECOM TECHNOLOGY vs. TRADEDOUBLER AB SK | AECOM TECHNOLOGY vs. CN MODERN DAIRY | AECOM TECHNOLOGY vs. CARSALESCOM |
| Lloyds Banking vs. MACOM Technology Solutions | Lloyds Banking vs. Wayside Technology Group | Lloyds Banking vs. CVR Medical Corp | Lloyds Banking vs. AECOM TECHNOLOGY |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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