Correlation Between Plastic Omnium and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium 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 Plastic Omnium and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and Lloyds Banking Group, you can compare the effects of market volatilities on Plastic Omnium 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 Plastic Omnium with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and Lloyds Banking.
Diversification Opportunities for Plastic Omnium and Lloyds Banking
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plastic and Lloyds is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium i.e., Plastic Omnium and Lloyds Banking go up and down completely randomly.
Pair Corralation between Plastic Omnium and Lloyds Banking
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 1.31 times more return on investment than Lloyds Banking. However, Plastic Omnium is 1.31 times more volatile than Lloyds Banking Group. It trades about 0.36 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.05 per unit of risk. If you would invest 821.00 in Plastic Omnium on September 28, 2024 and sell it today you would earn a total of 144.00 from holding Plastic Omnium or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. Lloyds Banking Group
Performance |
| Timeline |
| Plastic Omnium |
| Lloyds Banking Group |
Plastic Omnium and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and Lloyds Banking
The main advantage of trading using opposite Plastic Omnium and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium 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.| Plastic Omnium vs. Apple Inc | Plastic Omnium vs. Apple Inc | Plastic Omnium vs. Apple Inc | Plastic Omnium vs. Apple Inc |
| Lloyds Banking vs. BNP PARIBAS ADR | Lloyds Banking vs. Intesa Sanpaolo SpA | Lloyds Banking vs. Lloyds Banking Group | Lloyds Banking vs. UniCredit SpA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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