Correlation Between Lloyds Banking and Intuitive Investments
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Intuitive Investments 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 Intuitive Investments 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 Intuitive Investments Group, you can compare the effects of market volatilities on Lloyds Banking and Intuitive Investments 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 Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Intuitive Investments.
Diversification Opportunities for Lloyds Banking and Intuitive Investments
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lloyds and Intuitive is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Intuitive Investments go up and down completely randomly.
Pair Corralation between Lloyds Banking and Intuitive Investments
Assuming the 90 days trading horizon Lloyds Banking Group is expected to under-perform the Intuitive Investments. In addition to that, Lloyds Banking is 3.07 times more volatile than Intuitive Investments Group. It trades about -0.02 of its total potential returns per unit of risk. Intuitive Investments Group is currently generating about -0.05 per unit of volatility. If you would invest 12,500 in Intuitive Investments Group on September 12, 2024 and sell it today you would lose (50.00) from holding Intuitive Investments Group or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lloyds Banking Group vs. Intuitive Investments Group
Performance |
| Timeline |
| Lloyds Banking Group |
| Intuitive Investments |
Lloyds Banking and Intuitive Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Intuitive Investments
The main advantage of trading using opposite Lloyds Banking and Intuitive Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Intuitive Investments 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 Intuitive Investments will offset losses from the drop in Intuitive Investments' 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 |
| Intuitive Investments vs. Edita Food Industries | Intuitive Investments vs. Aeorema Communications Plc | Intuitive Investments vs. Hilton Food Group | Intuitive Investments vs. Fevertree Drinks 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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