Correlation Between Grupo Financiero and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Grupo Financiero 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 Grupo Financiero and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Financiero Galicia and Lloyds Banking Group, you can compare the effects of market volatilities on Grupo Financiero 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 Grupo Financiero with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Financiero and Lloyds Banking.
Diversification Opportunities for Grupo Financiero and Lloyds Banking
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grupo and Lloyds is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Financiero Galicia 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 Grupo Financiero 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 Grupo Financiero Galicia 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 Grupo Financiero i.e., Grupo Financiero and Lloyds Banking go up and down completely randomly.
Pair Corralation between Grupo Financiero and Lloyds Banking
Given the investment horizon of 90 days Grupo Financiero Galicia is expected to generate 2.02 times more return on investment than Lloyds Banking. However, Grupo Financiero is 2.02 times more volatile than Lloyds Banking Group. It trades about 0.14 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.04 per unit of risk. If you would invest 653.00 in Grupo Financiero Galicia on August 27, 2024 and sell it today you would earn a total of 4,895 from holding Grupo Financiero Galicia or generate 749.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Financiero Galicia vs. Lloyds Banking Group
Performance |
| Timeline |
| Grupo Financiero Galicia |
| Lloyds Banking Group |
Grupo Financiero and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Financiero and Lloyds Banking
The main advantage of trading using opposite Grupo Financiero and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Financiero 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.| Grupo Financiero vs. Grupo Supervielle SA | Grupo Financiero vs. BBVA Banco Frances | Grupo Financiero vs. Itau Unibanco Banco | Grupo Financiero vs. Banco Bradesco SA |
| Lloyds Banking vs. Itau Unibanco Banco | Lloyds Banking vs. Grupo Financiero Galicia | Lloyds Banking vs. Banco Macro SA | Lloyds Banking vs. Banco Santander Brasil |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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