Correlation Between Lloyds Banking and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Batm Advanced 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 Batm Advanced 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 Batm Advanced Communications, you can compare the effects of market volatilities on Lloyds Banking and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Batm Advanced.
Diversification Opportunities for Lloyds Banking and Batm Advanced
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lloyds and Batm is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Batm Advanced go up and down completely randomly.
Pair Corralation between Lloyds Banking and Batm Advanced
Assuming the 90 days trading horizon Lloyds Banking is expected to generate 30.02 times less return on investment than Batm Advanced. But when comparing it to its historical volatility, Lloyds Banking Group is 2.32 times less risky than Batm Advanced. It trades about 0.0 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Batm Advanced Communications on September 23, 2024 and sell it today you would earn a total of 248.00 from holding Batm Advanced Communications or generate 15.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. Batm Advanced Communications
Performance |
| Timeline |
| Lloyds Banking Group |
| Batm Advanced Commun |
Lloyds Banking and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Batm Advanced
The main advantage of trading using opposite Lloyds Banking and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced'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 |
| Batm Advanced vs. SupplyMe Capital PLC | Batm Advanced vs. Lloyds Banking Group | Batm Advanced vs. Premier African Minerals | Batm Advanced 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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