Correlation Between Lloyds Banking and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Annaly Capital 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 Annaly Capital 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 Annaly Capital Management,, you can compare the effects of market volatilities on Lloyds Banking and Annaly Capital 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 Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Annaly Capital.
Diversification Opportunities for Lloyds Banking and Annaly Capital
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lloyds and Annaly is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Annaly Capital Management, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annaly Capital Manag 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 Annaly Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annaly Capital Manag has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Annaly Capital go up and down completely randomly.
Pair Corralation between Lloyds Banking and Annaly Capital
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 2.24 times more return on investment than Annaly Capital. However, Lloyds Banking is 2.24 times more volatile than Annaly Capital Management,. It trades about 0.12 of its potential returns per unit of risk. Annaly Capital Management, is currently generating about 0.06 per unit of risk. If you would invest 1,679 in Lloyds Banking Group on November 6, 2024 and sell it today you would earn a total of 115.00 from holding Lloyds Banking Group or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. Annaly Capital Management,
Performance |
| Timeline |
| Lloyds Banking Group |
| Annaly Capital Manag |
Lloyds Banking and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Annaly Capital
The main advantage of trading using opposite Lloyds Banking and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Annaly Capital 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 Annaly Capital will offset losses from the drop in Annaly Capital's long position.| Lloyds Banking vs. Verizon Communications | Lloyds Banking vs. Trane Technologies plc | Lloyds Banking vs. Spotify Technology SA | Lloyds Banking vs. TechnipFMC plc |
| Annaly Capital vs. Patria Investments Limited | Annaly Capital vs. Waste Management | Annaly Capital vs. METISA Metalrgica Timboense | Annaly Capital vs. Clover Health Investments, |
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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