Correlation Between Lloyds Banking and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Hollywood Bowl 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 Hollywood Bowl 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 Hollywood Bowl Group, you can compare the effects of market volatilities on Lloyds Banking and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Hollywood Bowl.
Diversification Opportunities for Lloyds Banking and Hollywood Bowl
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lloyds and Hollywood is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Lloyds Banking and Hollywood Bowl
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 1.51 times more return on investment than Hollywood Bowl. However, Lloyds Banking is 1.51 times more volatile than Hollywood Bowl Group. It trades about 0.32 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.13 per unit of risk. If you would invest 5,396 in Lloyds Banking Group on October 24, 2024 and sell it today you would earn a total of 704.00 from holding Lloyds Banking Group or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. Hollywood Bowl Group
Performance |
| Timeline |
| Lloyds Banking Group |
| Hollywood Bowl Group |
Lloyds Banking and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Hollywood Bowl
The main advantage of trading using opposite Lloyds Banking and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.| Lloyds Banking vs. Prosiebensat 1 Media | Lloyds Banking vs. Centaur Media | Lloyds Banking vs. Ashtead Technology Holdings | Lloyds Banking vs. Sartorius Stedim Biotech |
| Hollywood Bowl vs. Tavistock Investments Plc | Hollywood Bowl vs. OneSavings Bank PLC | Hollywood Bowl vs. Tatton Asset Management | Hollywood Bowl vs. Jupiter Fund Management |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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