Correlation Between Lloyds Banking and Disney
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Disney 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 Disney 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 The Walt Disney, you can compare the effects of market volatilities on Lloyds Banking and Disney 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 Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Disney.
Diversification Opportunities for Lloyds Banking and Disney
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and Disney is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and The Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Disney go up and down completely randomly.
Pair Corralation between Lloyds Banking and Disney
Assuming the 90 days trading horizon Lloyds Banking is expected to generate 2.0 times less return on investment than Disney. In addition to that, Lloyds Banking is 1.07 times more volatile than The Walt Disney. It trades about 0.04 of its total potential returns per unit of risk. The Walt Disney is currently generating about 0.09 per unit of volatility. If you would invest 158,580 in The Walt Disney on September 12, 2024 and sell it today you would earn a total of 71,788 from holding The Walt Disney or generate 45.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lloyds Banking Group vs. The Walt Disney
Performance |
| Timeline |
| Lloyds Banking Group |
| Walt Disney |
Lloyds Banking and Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Disney
The main advantage of trading using opposite Lloyds Banking and Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Disney 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 Disney will offset losses from the drop in Disney's long position.| Lloyds Banking vs. Apple Inc | Lloyds Banking vs. Microsoft | Lloyds Banking vs. Alphabet Inc Class A | Lloyds Banking vs. Alphabet Inc |
| Disney vs. Lloyds Banking Group | Disney vs. Hoteles City Express | Disney vs. McEwen Mining | Disney vs. Grupo Sports World |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| 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 | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |