Correlation Between Lloyds Banking and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Eurobank Ergasias 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 Eurobank Ergasias 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 Eurobank Ergasias SA, you can compare the effects of market volatilities on Lloyds Banking and Eurobank Ergasias 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 Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Eurobank Ergasias.
Diversification Opportunities for Lloyds Banking and Eurobank Ergasias
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lloyds and Eurobank is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Eurobank Ergasias SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias 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 Eurobank Ergasias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurobank Ergasias has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between Lloyds Banking and Eurobank Ergasias
Considering the 90-day investment horizon Lloyds Banking Group is expected to under-perform the Eurobank Ergasias. But the stock apears to be less risky and, when comparing its historical volatility, Lloyds Banking Group is 1.32 times less risky than Eurobank Ergasias. The stock trades about -0.21 of its potential returns per unit of risk. The Eurobank Ergasias SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 100.00 in Eurobank Ergasias SA on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Eurobank Ergasias SA or generate 4.0% 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. Eurobank Ergasias SA
Performance |
| Timeline |
| Lloyds Banking Group |
| Eurobank Ergasias |
Lloyds Banking and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Eurobank Ergasias
The main advantage of trading using opposite Lloyds Banking and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Eurobank Ergasias 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 Eurobank Ergasias will offset losses from the drop in Eurobank Ergasias' 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 |
| Eurobank Ergasias vs. National Bank of | Eurobank Ergasias vs. Piraeus Bank SA | Eurobank Ergasias vs. Alpha Bank SA | Eurobank Ergasias vs. First Citizens BancShares |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |