Correlation Between Lloyds Banking and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and First Hawaiian 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 First Hawaiian 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 First Hawaiian, you can compare the effects of market volatilities on Lloyds Banking and First Hawaiian 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 First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and First Hawaiian.
Diversification Opportunities for Lloyds Banking and First Hawaiian
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and First is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian 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 First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and First Hawaiian go up and down completely randomly.
Pair Corralation between Lloyds Banking and First Hawaiian
Considering the 90-day investment horizon Lloyds Banking is expected to generate 1.49 times less return on investment than First Hawaiian. But when comparing it to its historical volatility, Lloyds Banking Group is 1.03 times less risky than First Hawaiian. It trades about 0.07 of its potential returns per unit of risk. First Hawaiian is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,724 in First Hawaiian on September 4, 2024 and sell it today you would earn a total of 1,016 from holding First Hawaiian or generate 58.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. First Hawaiian
Performance |
| Timeline |
| Lloyds Banking Group |
| First Hawaiian |
Lloyds Banking and First Hawaiian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and First Hawaiian
The main advantage of trading using opposite Lloyds Banking and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, First Hawaiian 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 First Hawaiian will offset losses from the drop in First Hawaiian'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 |
| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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