Correlation Between Ford and LLOYDS
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By analyzing existing cross correlation between Ford Motor and LLOYDS BANKING GROUP, you can compare the effects of market volatilities on Ford and LLOYDS 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 Ford with a short position of LLOYDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and LLOYDS.
Diversification Opportunities for Ford and LLOYDS
Very good diversification
The 3 months correlation between Ford and LLOYDS is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor 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 Ford 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 Ford Motor are associated (or correlated) with LLOYDS. 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 Ford i.e., Ford and LLOYDS go up and down completely randomly.
Pair Corralation between Ford and LLOYDS
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.23 times more return on investment than LLOYDS. However, Ford is 1.23 times more volatile than LLOYDS BANKING GROUP. It trades about 0.0 of its potential returns per unit of risk. LLOYDS BANKING GROUP is currently generating about -0.23 per unit of risk. If you would invest 1,122 in Ford Motor on August 29, 2024 and sell it today you would lose (12.00) from holding Ford Motor or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Ford Motor vs. LLOYDS BANKING GROUP
Performance |
| Timeline |
| Ford Motor |
| LLOYDS BANKING GROUP |
Ford and LLOYDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and LLOYDS
The main advantage of trading using opposite Ford and LLOYDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, LLOYDS 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 will offset losses from the drop in LLOYDS's long position.The idea behind Ford Motor and LLOYDS BANKING GROUP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| LLOYDS vs. AEP TEX INC | LLOYDS vs. US BANK NATIONAL | LLOYDS vs. Eat Beyond Global | LLOYDS vs. Charles Schwab Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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