Correlation Between Lloyds Banking and PT Bank
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and PT Bank 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 PT Bank 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 PT Bank Central, you can compare the effects of market volatilities on Lloyds Banking and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and PT Bank.
Diversification Opportunities for Lloyds Banking and PT Bank
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lloyds and PBCRF is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and PT Bank go up and down completely randomly.
Pair Corralation between Lloyds Banking and PT Bank
Assuming the 90 days horizon Lloyds Banking Group is expected to generate 0.35 times more return on investment than PT Bank. However, Lloyds Banking Group is 2.82 times less risky than PT Bank. It trades about 0.19 of its potential returns per unit of risk. PT Bank Central is currently generating about 0.03 per unit of risk. If you would invest 77.00 in Lloyds Banking Group on November 27, 2024 and sell it today you would earn a total of 6.00 from holding Lloyds Banking Group or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. PT Bank Central
Performance |
| Timeline |
| Lloyds Banking Group |
| PT Bank Central |
Lloyds Banking and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and PT Bank
The main advantage of trading using opposite Lloyds Banking and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank'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 |
| PT Bank vs. Commercial International Bank | PT Bank vs. Caixabank SA ADR | PT Bank vs. Bank Rakyat | PT Bank 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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