Correlation Between Lloyds Banking and MAHLE Metal
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and MAHLE Metal 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 Lloyds Banking and MAHLE Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lloyds Banking Group and MAHLE Metal Leve, you can compare the effects of market volatilities on Lloyds Banking and MAHLE Metal 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 Lloyds Banking with a short position of MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and MAHLE Metal.
Diversification Opportunities for Lloyds Banking and MAHLE Metal
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lloyds and MAHLE is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve and Lloyds Banking 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 Lloyds Banking Group are associated (or correlated) with MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and MAHLE Metal go up and down completely randomly.
Pair Corralation between Lloyds Banking and MAHLE Metal
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 1.85 times more return on investment than MAHLE Metal. However, Lloyds Banking is 1.85 times more volatile than MAHLE Metal Leve. It trades about 0.16 of its potential returns per unit of risk. MAHLE Metal Leve is currently generating about 0.01 per unit of risk. If you would invest 1,664 in Lloyds Banking Group on October 28, 2024 and sell it today you would earn a total of 150.00 from holding Lloyds Banking Group or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. MAHLE Metal Leve
Performance |
| Timeline |
| Lloyds Banking Group |
| MAHLE Metal Leve |
Lloyds Banking and MAHLE Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and MAHLE Metal
The main advantage of trading using opposite Lloyds Banking and MAHLE Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, MAHLE Metal 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 MAHLE Metal will offset losses from the drop in MAHLE Metal's long position.| Lloyds Banking vs. DXC Technology | Lloyds Banking vs. Unity Software | Lloyds Banking vs. Ross Stores | Lloyds Banking vs. Patria Investments Limited |
| MAHLE Metal vs. Ser Educacional Sa | MAHLE Metal vs. Yduqs Participaes SA | MAHLE Metal vs. PBG SA | MAHLE Metal vs. Movida Participaes SA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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