Correlation Between Lloyds Banking and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Piraeus Bank 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 Piraeus Bank 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 Piraeus Bank SA, you can compare the effects of market volatilities on Lloyds Banking and Piraeus Bank 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 Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Piraeus Bank.
Diversification Opportunities for Lloyds Banking and Piraeus Bank
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lloyds and Piraeus is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Piraeus Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Bank SA 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 Piraeus Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Bank SA has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Piraeus Bank go up and down completely randomly.
Pair Corralation between Lloyds Banking and Piraeus Bank
Considering the 90-day investment horizon Lloyds Banking Group is expected to under-perform the Piraeus Bank. But the stock apears to be less risky and, when comparing its historical volatility, Lloyds Banking Group is 1.61 times less risky than Piraeus Bank. The stock trades about -0.21 of its potential returns per unit of risk. The Piraeus Bank SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Piraeus Bank SA on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Piraeus Bank SA or generate 1.64% 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. Piraeus Bank SA
Performance |
| Timeline |
| Lloyds Banking Group |
| Piraeus Bank SA |
Lloyds Banking and Piraeus Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Piraeus Bank
The main advantage of trading using opposite Lloyds Banking and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Piraeus Bank 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 Piraeus Bank will offset losses from the drop in Piraeus Bank'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 |
| Piraeus Bank vs. Bankinter SA ADR | Piraeus Bank vs. JAPAN POST BANK | Piraeus Bank vs. JAPAN POST BANK | Piraeus Bank vs. Eurobank Ergasias Services |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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