Correlation Between Furukawa Electric and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Furukawa Electric 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 Furukawa Electric and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Furukawa Electric Co and Lloyds Banking Group, you can compare the effects of market volatilities on Furukawa Electric 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 Furukawa Electric with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Furukawa Electric and Lloyds Banking.
Diversification Opportunities for Furukawa Electric and Lloyds Banking
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Furukawa and Lloyds is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Furukawa Electric Co 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 Furukawa Electric 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 Furukawa Electric Co 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 Furukawa Electric i.e., Furukawa Electric and Lloyds Banking go up and down completely randomly.
Pair Corralation between Furukawa Electric and Lloyds Banking
If you would invest 69.00 in Lloyds Banking Group on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Lloyds Banking Group or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Furukawa Electric Co vs. Lloyds Banking Group
Performance |
| Timeline |
| Furukawa Electric |
| Lloyds Banking Group |
Furukawa Electric and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Furukawa Electric and Lloyds Banking
The main advantage of trading using opposite Furukawa Electric and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Furukawa Electric 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.| Furukawa Electric vs. FREYR Battery SA | Furukawa Electric vs. nVent Electric PLC | Furukawa Electric vs. Hubbell | Furukawa Electric vs. Advanced Energy Industries |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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