Correlation Between Japan Asia and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and Lloyds Banking Group, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and Lloyds Banking.
Diversification Opportunities for Japan Asia and Lloyds Banking
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and Lloyds is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment 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 Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and Lloyds Banking go up and down completely randomly.
Pair Corralation between Japan Asia and Lloyds Banking
Assuming the 90 days horizon Japan Asia is expected to generate 3.15 times less return on investment than Lloyds Banking. In addition to that, Japan Asia is 1.55 times more volatile than Lloyds Banking Group. It trades about 0.01 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.07 per unit of volatility. If you would invest 175.00 in Lloyds Banking Group on September 14, 2024 and sell it today you would earn a total of 71.00 from holding Lloyds Banking Group or generate 40.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. Lloyds Banking Group
Performance |
| Timeline |
| Japan Asia Investment |
| Lloyds Banking Group |
Japan Asia and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and Lloyds Banking
The main advantage of trading using opposite Japan Asia and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
| Lloyds Banking vs. ECHO INVESTMENT ZY | Lloyds Banking vs. Japan Asia Investment | Lloyds Banking vs. GREENX METALS LTD | Lloyds Banking vs. DISTRICT METALS |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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