Correlation Between Lloyds Banking and Itau Unibanco
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Itau Unibanco 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 Itau Unibanco 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 Itau Unibanco Banco, you can compare the effects of market volatilities on Lloyds Banking and Itau Unibanco 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 Itau Unibanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Itau Unibanco.
Diversification Opportunities for Lloyds Banking and Itau Unibanco
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lloyds and Itau is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Itau Unibanco Banco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itau Unibanco Banco 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 Itau Unibanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itau Unibanco Banco has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Itau Unibanco go up and down completely randomly.
Pair Corralation between Lloyds Banking and Itau Unibanco
Assuming the 90 days horizon Lloyds Banking Group is expected to generate 2.53 times more return on investment than Itau Unibanco. However, Lloyds Banking is 2.53 times more volatile than Itau Unibanco Banco. It trades about 0.02 of its potential returns per unit of risk. Itau Unibanco Banco is currently generating about -0.01 per unit of risk. If you would invest 68.00 in Lloyds Banking Group on August 26, 2024 and sell it today you would earn a total of 1.00 from holding Lloyds Banking Group or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
Lloyds Banking Group vs. Itau Unibanco Banco
Performance |
| Timeline |
| Lloyds Banking Group |
| Itau Unibanco Banco |
Lloyds Banking and Itau Unibanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Itau Unibanco
The main advantage of trading using opposite Lloyds Banking and Itau Unibanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Itau Unibanco 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 Itau Unibanco will offset losses from the drop in Itau Unibanco's long position.| Lloyds Banking vs. PSB Holdings | Lloyds Banking vs. United Overseas Bank | Lloyds Banking vs. Turkiye Garanti Bankasi |
| Itau Unibanco vs. Grupo Financiero Galicia | Itau Unibanco vs. Banco Macro SA | Itau Unibanco vs. Banco Santander Brasil | Itau Unibanco vs. Lloyds Banking 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |