Correlation Between Lloyds Banking and National Atomic
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and National Atomic 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 National Atomic 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 National Atomic Co, you can compare the effects of market volatilities on Lloyds Banking and National Atomic 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 National Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and National Atomic.
Diversification Opportunities for Lloyds Banking and National Atomic
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lloyds and National is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic 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 National Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and National Atomic go up and down completely randomly.
Pair Corralation between Lloyds Banking and National Atomic
Assuming the 90 days trading horizon Lloyds Banking Group is expected to under-perform the National Atomic. In addition to that, Lloyds Banking is 1.06 times more volatile than National Atomic Co. It trades about -0.14 of its total potential returns per unit of risk. National Atomic Co is currently generating about 0.15 per unit of volatility. If you would invest 3,845 in National Atomic Co on August 28, 2024 and sell it today you would earn a total of 180.00 from holding National Atomic Co or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. National Atomic Co
Performance |
| Timeline |
| Lloyds Banking Group |
| National Atomic |
Lloyds Banking and National Atomic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and National Atomic
The main advantage of trading using opposite Lloyds Banking and National Atomic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, National Atomic 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 National Atomic will offset losses from the drop in National Atomic's long position.| Lloyds Banking vs. National Atomic Co | Lloyds Banking vs. Flutter Entertainment PLC | Lloyds Banking vs. Camellia Plc | Lloyds Banking vs. Marwyn Value Investors |
| National Atomic vs. Zoom Video Communications | National Atomic vs. AfriTin Mining | National Atomic vs. Silvercorp Metals | National Atomic vs. McEwen Mining |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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