Correlation Between Lloyds Banking and Bank Rakyat
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Bank Rakyat 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 Bank Rakyat 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 Bank Rakyat, you can compare the effects of market volatilities on Lloyds Banking and Bank Rakyat 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 Bank Rakyat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Bank Rakyat.
Diversification Opportunities for Lloyds Banking and Bank Rakyat
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lloyds and Bank is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Rakyat 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 Bank Rakyat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Rakyat has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Bank Rakyat go up and down completely randomly.
Pair Corralation between Lloyds Banking and Bank Rakyat
Assuming the 90 days horizon Lloyds Banking Group is expected to generate 3.02 times more return on investment than Bank Rakyat. However, Lloyds Banking is 3.02 times more volatile than Bank Rakyat. It trades about 0.03 of its potential returns per unit of risk. Bank Rakyat is currently generating about -0.01 per unit of risk. If you would invest 59.00 in Lloyds Banking Group on October 13, 2024 and sell it today you would earn a total of 6.00 from holding Lloyds Banking Group or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.89% |
| Values | Daily Returns |
Lloyds Banking Group vs. Bank Rakyat
Performance |
| Timeline |
| Lloyds Banking Group |
| Bank Rakyat |
Lloyds Banking and Bank Rakyat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Bank Rakyat
The main advantage of trading using opposite Lloyds Banking and Bank Rakyat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Bank Rakyat 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 Bank Rakyat will offset losses from the drop in Bank Rakyat's long position.| Lloyds Banking vs. PT Bank Rakyat | Lloyds Banking vs. Barclays PLC | Lloyds Banking vs. Bank Mandiri Persero | Lloyds Banking vs. China Petroleum Chemical |
| Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |