Correlation Between Lloyds Banking and Odyssean Investment
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Odyssean Investment 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 Odyssean Investment 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 Odyssean Investment Trust, you can compare the effects of market volatilities on Lloyds Banking and Odyssean Investment 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 Odyssean Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Odyssean Investment.
Diversification Opportunities for Lloyds Banking and Odyssean Investment
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lloyds and Odyssean is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Odyssean Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssean Investment Trust 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 Odyssean Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssean Investment Trust has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Odyssean Investment go up and down completely randomly.
Pair Corralation between Lloyds Banking and Odyssean Investment
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 1.22 times more return on investment than Odyssean Investment. However, Lloyds Banking is 1.22 times more volatile than Odyssean Investment Trust. It trades about 0.06 of its potential returns per unit of risk. Odyssean Investment Trust is currently generating about 0.02 per unit of risk. If you would invest 4,373 in Lloyds Banking Group on September 4, 2024 and sell it today you would earn a total of 921.00 from holding Lloyds Banking Group or generate 21.06% 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. Odyssean Investment Trust
Performance |
| Timeline |
| Lloyds Banking Group |
| Odyssean Investment Trust |
Lloyds Banking and Odyssean Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Odyssean Investment
The main advantage of trading using opposite Lloyds Banking and Odyssean Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Odyssean Investment 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 Odyssean Investment will offset losses from the drop in Odyssean Investment'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 |
| Odyssean Investment vs. SupplyMe Capital PLC | Odyssean Investment vs. Lloyds Banking Group | Odyssean Investment vs. Premier African Minerals | Odyssean Investment 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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