Correlation Between Lloyds Banking and PLAY2CHILL
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and PLAY2CHILL 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 PLAY2CHILL 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 PLAY2CHILL SA ZY, you can compare the effects of market volatilities on Lloyds Banking and PLAY2CHILL 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 PLAY2CHILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and PLAY2CHILL.
Diversification Opportunities for Lloyds Banking and PLAY2CHILL
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lloyds and PLAY2CHILL is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and PLAY2CHILL SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAY2CHILL SA ZY 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 PLAY2CHILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAY2CHILL SA ZY has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and PLAY2CHILL go up and down completely randomly.
Pair Corralation between Lloyds Banking and PLAY2CHILL
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 1.18 times more return on investment than PLAY2CHILL. However, Lloyds Banking is 1.18 times more volatile than PLAY2CHILL SA ZY. It trades about 0.03 of its potential returns per unit of risk. PLAY2CHILL SA ZY is currently generating about 0.02 per unit of risk. If you would invest 229.00 in Lloyds Banking Group on September 3, 2024 and sell it today you would earn a total of 19.00 from holding Lloyds Banking Group or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. PLAY2CHILL SA ZY
Performance |
| Timeline |
| Lloyds Banking Group |
| PLAY2CHILL SA ZY |
Lloyds Banking and PLAY2CHILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and PLAY2CHILL
The main advantage of trading using opposite Lloyds Banking and PLAY2CHILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, PLAY2CHILL 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 PLAY2CHILL will offset losses from the drop in PLAY2CHILL's long position.| Lloyds Banking vs. National Bank Holdings | Lloyds Banking vs. Tradegate AG Wertpapierhandelsbank | Lloyds Banking vs. GUARDANT HEALTH CL | Lloyds Banking vs. National Health Investors |
| PLAY2CHILL vs. Nintendo Co | PLAY2CHILL vs. Nintendo Co | PLAY2CHILL vs. Sea Limited | PLAY2CHILL vs. Take Two Interactive Software |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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