Correlation Between Lloyds Banking and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Ameriprise Financial 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 Ameriprise Financial 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 Ameriprise Financial, you can compare the effects of market volatilities on Lloyds Banking and Ameriprise Financial 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 Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Ameriprise Financial.
Diversification Opportunities for Lloyds Banking and Ameriprise Financial
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lloyds and Ameriprise is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial 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 Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Lloyds Banking and Ameriprise Financial
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 0.15 times more return on investment than Ameriprise Financial. However, Lloyds Banking Group is 6.74 times less risky than Ameriprise Financial. It trades about 0.59 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.03 per unit of risk. If you would invest 14,260 in Lloyds Banking Group on December 4, 2024 and sell it today you would earn a total of 355.00 from holding Lloyds Banking Group or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lloyds Banking Group vs. Ameriprise Financial
Performance |
| Timeline |
| Lloyds Banking Group |
| Ameriprise Financial |
Lloyds Banking and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Ameriprise Financial
The main advantage of trading using opposite Lloyds Banking and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| Lloyds Banking vs. Fulcrum Metals PLC | Lloyds Banking vs. Metals Exploration Plc | Lloyds Banking vs. Charter Communications Cl | Lloyds Banking vs. Eastinco Mining Exploration |
| Ameriprise Financial vs. Monster Beverage Corp | Ameriprise Financial vs. Roebuck Food Group | Ameriprise Financial vs. Sligro Food Group | Ameriprise Financial vs. Austevoll Seafood ASA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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