Correlation Between Lloyds Banking and Bank of Hawaii
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Bank of Hawaii 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 Bank of Hawaii 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 Bank of Hawaii, you can compare the effects of market volatilities on Lloyds Banking and Bank of Hawaii 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 Bank of Hawaii. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Bank of Hawaii.
Diversification Opportunities for Lloyds Banking and Bank of Hawaii
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lloyds and Bank is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Bank of Hawaii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Hawaii 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 Bank of Hawaii. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Hawaii has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Bank of Hawaii go up and down completely randomly.
Pair Corralation between Lloyds Banking and Bank of Hawaii
Considering the 90-day investment horizon Lloyds Banking Group is expected to generate 1.36 times more return on investment than Bank of Hawaii. However, Lloyds Banking is 1.36 times more volatile than Bank of Hawaii. It trades about 0.07 of its potential returns per unit of risk. Bank of Hawaii is currently generating about 0.08 per unit of risk. If you would invest 199.00 in Lloyds Banking Group on September 4, 2024 and sell it today you would earn a total of 69.00 from holding Lloyds Banking Group or generate 34.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. Bank of Hawaii
Performance |
| Timeline |
| Lloyds Banking Group |
| Bank of Hawaii |
Lloyds Banking and Bank of Hawaii Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Bank of Hawaii
The main advantage of trading using opposite Lloyds Banking and Bank of Hawaii positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Bank of Hawaii 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 Bank of Hawaii will offset losses from the drop in Bank of Hawaii's long position.| Lloyds Banking vs. Itau Unibanco Banco | Lloyds Banking vs. Grupo Financiero Galicia | Lloyds Banking vs. Banco Macro SA | Lloyds Banking vs. Banco Santander Brasil |
| Bank of Hawaii vs. CullenFrost Bankers | Bank of Hawaii vs. Citizens Financial Group | Bank of Hawaii vs. Cadence Bank | Bank of Hawaii vs. Truist Financial |
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
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |