Correlation Between Lloyds Banking and SYSTEMAIR
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and SYSTEMAIR 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 SYSTEMAIR 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 SYSTEMAIR AB, you can compare the effects of market volatilities on Lloyds Banking and SYSTEMAIR 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 SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and SYSTEMAIR.
Diversification Opportunities for Lloyds Banking and SYSTEMAIR
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lloyds and SYSTEMAIR is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB 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 SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and SYSTEMAIR go up and down completely randomly.
Pair Corralation between Lloyds Banking and SYSTEMAIR
Assuming the 90 days trading horizon Lloyds Banking is expected to generate 24.27 times less return on investment than SYSTEMAIR. In addition to that, Lloyds Banking is 1.28 times more volatile than SYSTEMAIR AB. It trades about 0.01 of its total potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.32 per unit of volatility. If you would invest 694.00 in SYSTEMAIR AB on September 1, 2024 and sell it today you would earn a total of 88.00 from holding SYSTEMAIR AB or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. SYSTEMAIR AB
Performance |
| Timeline |
| Lloyds Banking Group |
| SYSTEMAIR AB |
Lloyds Banking and SYSTEMAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and SYSTEMAIR
The main advantage of trading using opposite Lloyds Banking and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, SYSTEMAIR 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 SYSTEMAIR will offset losses from the drop in SYSTEMAIR's long position.| Lloyds Banking vs. Microbot Medical | Lloyds Banking vs. ePlay Digital | Lloyds Banking vs. LG Display Co | Lloyds Banking vs. PLAY2CHILL SA ZY |
| SYSTEMAIR vs. CeoTronics AG | SYSTEMAIR vs. Check Point Software | SYSTEMAIR vs. Ares Management Corp | SYSTEMAIR vs. X Fab Silicon |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |