Correlation Between Lloyds Banking and PIAGGIO C
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and PIAGGIO C 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 PIAGGIO C 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 PIAGGIO C, you can compare the effects of market volatilities on Lloyds Banking and PIAGGIO C 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 PIAGGIO C. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and PIAGGIO C.
Diversification Opportunities for Lloyds Banking and PIAGGIO C
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lloyds and PIAGGIO is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and PIAGGIO C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIAGGIO C 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 PIAGGIO C. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIAGGIO C has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and PIAGGIO C go up and down completely randomly.
Pair Corralation between Lloyds Banking and PIAGGIO C
Assuming the 90 days trading horizon Lloyds Banking Group is expected to under-perform the PIAGGIO C. But the stock apears to be less risky and, when comparing its historical volatility, Lloyds Banking Group is 1.05 times less risky than PIAGGIO C. The stock trades about -0.06 of its potential returns per unit of risk. The PIAGGIO C is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 207.00 in PIAGGIO C on September 13, 2024 and sell it today you would earn a total of 6.00 from holding PIAGGIO C or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. PIAGGIO C
Performance |
| Timeline |
| Lloyds Banking Group |
| PIAGGIO C |
Lloyds Banking and PIAGGIO C Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and PIAGGIO C
The main advantage of trading using opposite Lloyds Banking and PIAGGIO C positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, PIAGGIO C 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 PIAGGIO C will offset losses from the drop in PIAGGIO C's long position.| Lloyds Banking vs. ECHO INVESTMENT ZY | Lloyds Banking vs. Japan Asia Investment | Lloyds Banking vs. GREENX METALS LTD | Lloyds Banking vs. DISTRICT METALS |
| PIAGGIO C vs. AVITA Medical | PIAGGIO C vs. ONWARD MEDICAL BV | PIAGGIO C vs. ADRIATIC METALS LS 013355 | PIAGGIO C vs. MeVis Medical Solutions |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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