Correlation Between Lloyds Banking and General Dynamics
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and General Dynamics 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 General Dynamics 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 General Dynamics, you can compare the effects of market volatilities on Lloyds Banking and General Dynamics 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 General Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and General Dynamics.
Diversification Opportunities for Lloyds Banking and General Dynamics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and General is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and General Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Dynamics 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 General Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Dynamics has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and General Dynamics go up and down completely randomly.
Pair Corralation between Lloyds Banking and General Dynamics
If you would invest 4,950 in Lloyds Banking Group on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Lloyds Banking Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. General Dynamics
Performance |
| Timeline |
| Lloyds Banking Group |
| General Dynamics |
Lloyds Banking and General Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and General Dynamics
The main advantage of trading using opposite Lloyds Banking and General Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, General Dynamics 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 General Dynamics will offset losses from the drop in General Dynamics' long position.| Lloyds Banking vs. Apple Inc | Lloyds Banking vs. Microsoft | Lloyds Banking vs. Alphabet Inc Class A | Lloyds Banking vs. Alphabet Inc |
| General Dynamics vs. Ameriprise Financial | General Dynamics vs. First Republic Bank | General Dynamics vs. Deutsche Bank Aktiengesellschaft | General Dynamics vs. Lloyds Banking Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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