Correlation Between Eurobank Ergasias and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Eurobank Ergasias 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 Eurobank Ergasias and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurobank Ergasias SA and Lloyds Banking Group, you can compare the effects of market volatilities on Eurobank Ergasias 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 Eurobank Ergasias with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurobank Ergasias and Lloyds Banking.
Diversification Opportunities for Eurobank Ergasias and Lloyds Banking
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eurobank and Lloyds is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Eurobank Ergasias 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 Eurobank Ergasias 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 Eurobank Ergasias 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 Eurobank Ergasias i.e., Eurobank Ergasias and Lloyds Banking go up and down completely randomly.
Pair Corralation between Eurobank Ergasias and Lloyds Banking
Assuming the 90 days horizon Eurobank Ergasias SA is expected to generate 1.32 times more return on investment than Lloyds Banking. However, Eurobank Ergasias is 1.32 times more volatile than Lloyds Banking Group. It trades about 0.09 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about -0.21 per unit of risk. If you would invest 100.00 in Eurobank Ergasias SA on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Eurobank Ergasias SA or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eurobank Ergasias SA vs. Lloyds Banking Group
Performance |
| Timeline |
| Eurobank Ergasias |
| Lloyds Banking Group |
Eurobank Ergasias and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurobank Ergasias and Lloyds Banking
The main advantage of trading using opposite Eurobank Ergasias and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurobank Ergasias 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.| Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. Piraeus Bank SA | Eurobank Ergasias vs. Alpha Bank SA | Eurobank Ergasias vs. First Citizens BancShares |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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