Correlation Between Expand Energy and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Expand Energy 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 Expand Energy and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Lloyds Banking Group, you can compare the effects of market volatilities on Expand Energy 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 Expand Energy with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Lloyds Banking.
Diversification Opportunities for Expand Energy and Lloyds Banking
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Expand and Lloyds is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy 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 Expand Energy 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 Expand Energy 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 Expand Energy i.e., Expand Energy and Lloyds Banking go up and down completely randomly.
Pair Corralation between Expand Energy and Lloyds Banking
Assuming the 90 days horizon Expand Energy is expected to generate 0.6 times more return on investment than Lloyds Banking. However, Expand Energy is 1.65 times less risky than Lloyds Banking. It trades about 0.35 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.2 per unit of risk. If you would invest 8,963 in Expand Energy on November 3, 2024 and sell it today you would earn a total of 1,169 from holding Expand Energy or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Lloyds Banking Group
Performance |
| Timeline |
| Expand Energy |
| Lloyds Banking Group |
Expand Energy and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Lloyds Banking
The main advantage of trading using opposite Expand Energy and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy 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.| Expand Energy vs. Grupo Aeroportuario del | Expand Energy vs. Mako Mining Corp | Expand Energy vs. ioneer Ltd American | Expand Energy vs. Harmony Gold Mining |
| Lloyds Banking vs. PT Bank Rakyat | Lloyds Banking vs. Barclays PLC | Lloyds Banking vs. Bank Mandiri Persero | Lloyds Banking vs. China Petroleum Chemical |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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