Correlation Between Lloyds Banking and Aurora Investment
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Aurora Investment 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 Aurora Investment 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 Aurora Investment Trust, you can compare the effects of market volatilities on Lloyds Banking and Aurora Investment 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 Aurora Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Aurora Investment.
Diversification Opportunities for Lloyds Banking and Aurora Investment
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lloyds and Aurora is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust 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 Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Aurora Investment go up and down completely randomly.
Pair Corralation between Lloyds Banking and Aurora Investment
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 1.37 times more return on investment than Aurora Investment. However, Lloyds Banking is 1.37 times more volatile than Aurora Investment Trust. It trades about 0.06 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about 0.01 per unit of risk. If you would invest 4,373 in Lloyds Banking Group on September 4, 2024 and sell it today you would earn a total of 921.00 from holding Lloyds Banking Group or generate 21.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. Aurora Investment Trust
Performance |
| Timeline |
| Lloyds Banking Group |
| Aurora Investment Trust |
Lloyds Banking and Aurora Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Aurora Investment
The main advantage of trading using opposite Lloyds Banking and Aurora Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Aurora Investment 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 Aurora Investment will offset losses from the drop in Aurora Investment's long position.| Lloyds Banking vs. Samsung Electronics Co | Lloyds Banking vs. Samsung Electronics Co | Lloyds Banking vs. Hyundai Motor | Lloyds Banking vs. Toyota Motor Corp |
| Aurora Investment vs. SupplyMe Capital PLC | Aurora Investment vs. Lloyds Banking Group | Aurora Investment vs. Premier African Minerals | Aurora Investment vs. SANTANDER UK 8 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |