Correlation Between Lloyds Banking and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Schibsted ASA 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 Schibsted ASA 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 Schibsted ASA A, you can compare the effects of market volatilities on Lloyds Banking and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Schibsted ASA.
Diversification Opportunities for Lloyds Banking and Schibsted ASA
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lloyds and Schibsted is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Schibsted ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA A 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA A has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Schibsted ASA go up and down completely randomly.
Pair Corralation between Lloyds Banking and Schibsted ASA
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 1.36 times more return on investment than Schibsted ASA. However, Lloyds Banking is 1.36 times more volatile than Schibsted ASA A. It trades about 0.05 of its potential returns per unit of risk. Schibsted ASA A is currently generating about 0.04 per unit of risk. If you would invest 260.00 in Lloyds Banking Group on November 2, 2024 and sell it today you would earn a total of 26.00 from holding Lloyds Banking Group or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
Lloyds Banking Group vs. Schibsted ASA A
Performance |
| Timeline |
| Lloyds Banking Group |
| Schibsted ASA A |
Lloyds Banking and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Schibsted ASA
The main advantage of trading using opposite Lloyds Banking and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.| Lloyds Banking vs. Iridium Communications | Lloyds Banking vs. Games Workshop Group | Lloyds Banking vs. MOBILE FACTORY INC | Lloyds Banking vs. GAMING FAC SA |
| Schibsted ASA vs. RELX PLC | Schibsted ASA vs. Relx PLC ADR | Schibsted ASA vs. Wolters Kluwer NV | Schibsted ASA vs. WOLTERS KLUWER ADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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