Correlation Between GMxico Transportes and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes 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 GMxico Transportes and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and Lloyds Banking Group, you can compare the effects of market volatilities on GMxico Transportes 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 GMxico Transportes with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Lloyds Banking.
Diversification Opportunities for GMxico Transportes and Lloyds Banking
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between GMxico and Lloyds is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB 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 GMxico Transportes 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 GMxico Transportes SAB 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 GMxico Transportes i.e., GMxico Transportes and Lloyds Banking go up and down completely randomly.
Pair Corralation between GMxico Transportes and Lloyds Banking
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to under-perform the Lloyds Banking. But the stock apears to be less risky and, when comparing its historical volatility, GMxico Transportes SAB is 1.44 times less risky than Lloyds Banking. The stock trades about -0.04 of its potential returns per unit of risk. The Lloyds Banking Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,417 in Lloyds Banking Group on November 8, 2024 and sell it today you would earn a total of 2,807 from holding Lloyds Banking Group or generate 82.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
GMxico Transportes SAB vs. Lloyds Banking Group
Performance |
| Timeline |
| GMxico Transportes SAB |
| Lloyds Banking Group |
GMxico Transportes and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMxico Transportes and Lloyds Banking
The main advantage of trading using opposite GMxico Transportes and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes 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.| GMxico Transportes vs. McEwen Mining | GMxico Transportes vs. Air Transport Services | GMxico Transportes vs. Micron Technology | GMxico Transportes vs. Verizon Communications |
| Lloyds Banking vs. FibraHotel | Lloyds Banking vs. Steel Dynamics | Lloyds Banking vs. Southern Copper | Lloyds Banking vs. CVS Health |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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