Correlation Between Lloyds Banking and Bank Mandiri
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Bank Mandiri 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 Mandiri 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 Mandiri Persero, you can compare the effects of market volatilities on Lloyds Banking and Bank Mandiri 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 Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Bank Mandiri.
Diversification Opportunities for Lloyds Banking and Bank Mandiri
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lloyds and Bank is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Bank Mandiri Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mandiri Persero 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 Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mandiri Persero has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Bank Mandiri go up and down completely randomly.
Pair Corralation between Lloyds Banking and Bank Mandiri
Assuming the 90 days horizon Lloyds Banking Group is expected to generate 1.04 times more return on investment than Bank Mandiri. However, Lloyds Banking is 1.04 times more volatile than Bank Mandiri Persero. It trades about -0.04 of its potential returns per unit of risk. Bank Mandiri Persero is currently generating about -0.2 per unit of risk. If you would invest 69.00 in Lloyds Banking Group on September 23, 2024 and sell it today you would lose (2.00) from holding Lloyds Banking Group or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. Bank Mandiri Persero
Performance |
| Timeline |
| Lloyds Banking Group |
| Bank Mandiri Persero |
Lloyds Banking and Bank Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Bank Mandiri
The main advantage of trading using opposite Lloyds Banking and Bank Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Bank Mandiri 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 Mandiri will offset losses from the drop in Bank Mandiri's long position.| Lloyds Banking vs. Banco Bradesco SA | Lloyds Banking vs. Itau Unibanco Banco | Lloyds Banking vs. Deutsche Bank AG | Lloyds Banking vs. Banco Santander Brasil |
| Bank Mandiri vs. Banco Bradesco SA | Bank Mandiri vs. Itau Unibanco Banco | Bank Mandiri vs. Lloyds Banking Group | Bank Mandiri vs. Deutsche Bank AG |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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