Correlation Between MAHLE Metal and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal 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 MAHLE Metal and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and Lloyds Banking Group, you can compare the effects of market volatilities on MAHLE Metal 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 MAHLE Metal with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Lloyds Banking.
Diversification Opportunities for MAHLE Metal and Lloyds Banking
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MAHLE and Lloyds is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve 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 MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and Lloyds Banking go up and down completely randomly.
Pair Corralation between MAHLE Metal and Lloyds Banking
Assuming the 90 days trading horizon MAHLE Metal is expected to generate 49.13 times less return on investment than Lloyds Banking. But when comparing it to its historical volatility, MAHLE Metal Leve is 1.85 times less risky than Lloyds Banking. It trades about 0.01 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. 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 |
MAHLE Metal Leve vs. Lloyds Banking Group
Performance |
| Timeline |
| MAHLE Metal Leve |
| Lloyds Banking Group |
MAHLE Metal and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Lloyds Banking
The main advantage of trading using opposite MAHLE Metal and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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.| MAHLE Metal vs. Ser Educacional Sa | MAHLE Metal vs. Yduqs Participaes SA | MAHLE Metal vs. PBG SA | MAHLE Metal vs. Movida Participaes SA |
| Lloyds Banking vs. DXC Technology | Lloyds Banking vs. Unity Software | Lloyds Banking vs. Ross Stores | Lloyds Banking vs. Patria Investments Limited |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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