Correlation Between Energean Oil and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Energean Oil 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 Energean Oil and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energean Oil Gas and Lloyds Banking Group, you can compare the effects of market volatilities on Energean Oil 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 Energean Oil with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energean Oil and Lloyds Banking.
Diversification Opportunities for Energean Oil and Lloyds Banking
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energean and Lloyds is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Energean Oil Gas 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 Energean Oil 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 Energean Oil Gas 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 Energean Oil i.e., Energean Oil and Lloyds Banking go up and down completely randomly.
Pair Corralation between Energean Oil and Lloyds Banking
Assuming the 90 days trading horizon Energean Oil is expected to generate 3.0 times less return on investment than Lloyds Banking. In addition to that, Energean Oil is 1.67 times more volatile than Lloyds Banking Group. It trades about 0.01 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.04 per unit of volatility. If you would invest 4,767 in Lloyds Banking Group on November 2, 2024 and sell it today you would earn a total of 1,467 from holding Lloyds Banking Group or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energean Oil Gas vs. Lloyds Banking Group
Performance |
| Timeline |
| Energean Oil Gas |
| Lloyds Banking Group |
Energean Oil and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energean Oil and Lloyds Banking
The main advantage of trading using opposite Energean Oil and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energean Oil 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.| Energean Oil vs. Porvair plc | Energean Oil vs. Adriatic Metals | Energean Oil vs. Pentair PLC | Energean Oil vs. bet at home AG |
| Lloyds Banking vs. LBG Media PLC | Lloyds Banking vs. One Media iP | Lloyds Banking vs. JD Sports Fashion | Lloyds Banking vs. Ubisoft Entertainment |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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