Correlation Between Lloyds Banking and CONOCOPHILLIPS (YCPSG)
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and CONOCOPHILLIPS (YCPSG) 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 CONOCOPHILLIPS (YCPSG) 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 CONOCOPHILLIPS, you can compare the effects of market volatilities on Lloyds Banking and CONOCOPHILLIPS (YCPSG) 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 CONOCOPHILLIPS (YCPSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and CONOCOPHILLIPS (YCPSG).
Diversification Opportunities for Lloyds Banking and CONOCOPHILLIPS (YCPSG)
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lloyds and CONOCOPHILLIPS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and CONOCOPHILLIPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONOCOPHILLIPS (YCPSG) 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 CONOCOPHILLIPS (YCPSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONOCOPHILLIPS (YCPSG) has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and CONOCOPHILLIPS (YCPSG) go up and down completely randomly.
Pair Corralation between Lloyds Banking and CONOCOPHILLIPS (YCPSG)
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 1.37 times more return on investment than CONOCOPHILLIPS (YCPSG). However, Lloyds Banking is 1.37 times more volatile than CONOCOPHILLIPS. It trades about 0.04 of its potential returns per unit of risk. CONOCOPHILLIPS is currently generating about 0.03 per unit of risk. If you would invest 185.00 in Lloyds Banking Group on August 31, 2024 and sell it today you would earn a total of 57.00 from holding Lloyds Banking Group or generate 30.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Lloyds Banking Group vs. CONOCOPHILLIPS
Performance |
| Timeline |
| Lloyds Banking Group |
| CONOCOPHILLIPS (YCPSG) |
Lloyds Banking and CONOCOPHILLIPS (YCPSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and CONOCOPHILLIPS (YCPSG)
The main advantage of trading using opposite Lloyds Banking and CONOCOPHILLIPS (YCPSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, CONOCOPHILLIPS (YCPSG) 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 CONOCOPHILLIPS (YCPSG) will offset losses from the drop in CONOCOPHILLIPS (YCPSG)'s long position.| Lloyds Banking vs. VARIOUS EATERIES LS | Lloyds Banking vs. Darden Restaurants | Lloyds Banking vs. AGF Management Limited | Lloyds Banking vs. ETFS Coffee ETC |
| CONOCOPHILLIPS (YCPSG) vs. Public Storage | CONOCOPHILLIPS (YCPSG) vs. DATAGROUP SE | CONOCOPHILLIPS (YCPSG) vs. BW OFFSHORE LTD | CONOCOPHILLIPS (YCPSG) vs. Science Applications International |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |