Correlation Between Lloyds Banking and EBay
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and EBay 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 EBay 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 eBay Inc, you can compare the effects of market volatilities on Lloyds Banking and EBay 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 EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and EBay.
Diversification Opportunities for Lloyds Banking and EBay
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and EBay is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc 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 EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and EBay go up and down completely randomly.
Pair Corralation between Lloyds Banking and EBay
If you would invest 126,299 in eBay Inc on September 13, 2024 and sell it today you would earn a total of 1,901 from holding eBay Inc or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lloyds Banking Group vs. eBay Inc
Performance |
| Timeline |
| Lloyds Banking Group |
| eBay Inc |
Lloyds Banking and EBay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and EBay
The main advantage of trading using opposite Lloyds Banking and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.| Lloyds Banking vs. Taiwan Semiconductor Manufacturing | Lloyds Banking vs. McEwen Mining | Lloyds Banking vs. New Oriental Education | Lloyds Banking vs. Martin Marietta Materials |
| EBay vs. GMxico Transportes SAB | EBay vs. Genworth Financial | EBay vs. Applied Materials | EBay 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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