Correlation Between Lloyds Banking and Amedeo Air
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Amedeo Air 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 Amedeo Air 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 Amedeo Air Four, you can compare the effects of market volatilities on Lloyds Banking and Amedeo Air 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 Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Amedeo Air.
Diversification Opportunities for Lloyds Banking and Amedeo Air
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lloyds and Amedeo is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four 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 Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Amedeo Air go up and down completely randomly.
Pair Corralation between Lloyds Banking and Amedeo Air
Assuming the 90 days trading horizon Lloyds Banking Group is expected to under-perform the Amedeo Air. In addition to that, Lloyds Banking is 1.71 times more volatile than Amedeo Air Four. It trades about -0.06 of its total potential returns per unit of risk. Amedeo Air Four is currently generating about 0.48 per unit of volatility. If you would invest 5,180 in Amedeo Air Four on September 22, 2024 and sell it today you would earn a total of 360.00 from holding Amedeo Air Four or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. Amedeo Air Four
Performance |
| Timeline |
| Lloyds Banking Group |
| Amedeo Air Four |
Lloyds Banking and Amedeo Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Amedeo Air
The main advantage of trading using opposite Lloyds Banking and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.| Lloyds Banking vs. Blackstone Loan Financing | Lloyds Banking vs. Samsung Electronics Co | Lloyds Banking vs. Dalata Hotel Group | Lloyds Banking vs. Park Hotels Resorts |
| Amedeo Air vs. Ryanair Holdings plc | Amedeo Air vs. Capital Drilling | Amedeo Air vs. Molson Coors Beverage | Amedeo Air vs. DXC Technology Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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