Correlation Between Lloyds Banking and Fidelity China
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Fidelity China 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 Fidelity China 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 Fidelity China Special, you can compare the effects of market volatilities on Lloyds Banking and Fidelity China 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 Fidelity China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Fidelity China.
Diversification Opportunities for Lloyds Banking and Fidelity China
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lloyds and Fidelity is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Fidelity China Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Special 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 Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Special has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Fidelity China go up and down completely randomly.
Pair Corralation between Lloyds Banking and Fidelity China
Assuming the 90 days trading horizon Lloyds Banking Group is expected to under-perform the Fidelity China. But the stock apears to be less risky and, when comparing its historical volatility, Lloyds Banking Group is 1.36 times less risky than Fidelity China. The stock trades about -0.11 of its potential returns per unit of risk. The Fidelity China Special is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 21,600 in Fidelity China Special on September 5, 2024 and sell it today you would lose (250.00) from holding Fidelity China Special or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. Fidelity China Special
Performance |
| Timeline |
| Lloyds Banking Group |
| Fidelity China Special |
Lloyds Banking and Fidelity China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Fidelity China
The main advantage of trading using opposite Lloyds Banking and Fidelity China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Fidelity China 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 Fidelity China will offset losses from the drop in Fidelity China's long position.| Lloyds Banking vs. AcadeMedia AB | Lloyds Banking vs. mobilezone holding AG | Lloyds Banking vs. One Media iP | Lloyds Banking vs. LBG Media PLC |
| Fidelity China vs. SupplyMe Capital PLC | Fidelity China vs. Lloyds Banking Group | Fidelity China vs. Premier African Minerals | Fidelity China 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |