Correlation Between Impax Environmental and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Impax Environmental 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 Impax Environmental and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Lloyds Banking Group, you can compare the effects of market volatilities on Impax Environmental 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 Impax Environmental with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Lloyds Banking.
Diversification Opportunities for Impax Environmental and Lloyds Banking
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Impax and Lloyds is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets 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 Impax Environmental 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 Impax Environmental Markets 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 Impax Environmental i.e., Impax Environmental and Lloyds Banking go up and down completely randomly.
Pair Corralation between Impax Environmental and Lloyds Banking
Assuming the 90 days trading horizon Impax Environmental Markets is expected to under-perform the Lloyds Banking. In addition to that, Impax Environmental is 5.39 times more volatile than Lloyds Banking Group. It trades about -0.31 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.31 per unit of volatility. If you would invest 13,940 in Lloyds Banking Group on September 12, 2024 and sell it today you would earn a total of 125.00 from holding Lloyds Banking Group or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Lloyds Banking Group
Performance |
| Timeline |
| Impax Environmental |
| Lloyds Banking Group |
Impax Environmental and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Lloyds Banking
The main advantage of trading using opposite Impax Environmental and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental 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.| Impax Environmental vs. Samsung Electronics Co | Impax Environmental vs. Samsung Electronics Co | Impax Environmental vs. Hyundai Motor | Impax Environmental vs. Toyota Motor Corp |
| Lloyds Banking vs. Toyota Motor Corp | Lloyds Banking vs. SoftBank Group Corp | Lloyds Banking vs. OTP Bank Nyrt | Lloyds Banking vs. Hershey Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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