Correlation Between Lloyds Banking and Baring Emerging
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Baring Emerging 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 Baring Emerging 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 Baring Emerging Europe, you can compare the effects of market volatilities on Lloyds Banking and Baring Emerging 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 Baring Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Baring Emerging.
Diversification Opportunities for Lloyds Banking and Baring Emerging
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and Baring is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Baring Emerging Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baring Emerging Europe 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 Baring Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baring Emerging Europe has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Baring Emerging go up and down completely randomly.
Pair Corralation between Lloyds Banking and Baring Emerging
If you would invest 0.00 in Baring Emerging Europe on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Baring Emerging Europe or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Lloyds Banking Group vs. Baring Emerging Europe
Performance |
| Timeline |
| Lloyds Banking Group |
| Baring Emerging Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Lloyds Banking and Baring Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Baring Emerging
The main advantage of trading using opposite Lloyds Banking and Baring Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Baring Emerging 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 Baring Emerging will offset losses from the drop in Baring Emerging's long position.| Lloyds Banking vs. Foresight Environmental Infrastructure | Lloyds Banking vs. Ecclesiastical Insurance Office | Lloyds Banking vs. Polar Capital Technology | Lloyds Banking vs. Alfa Financial Software |
| Baring Emerging vs. Endeavour Mining Corp | Baring Emerging vs. Waste Management | Baring Emerging vs. Infrastrutture Wireless Italiane | Baring Emerging vs. Metals Exploration Plc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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