Correlation Between Lloyds Banking and Glencore Plc
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Glencore Plc 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 Glencore Plc 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 Glencore plc, you can compare the effects of market volatilities on Lloyds Banking and Glencore Plc 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 Glencore Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Glencore Plc.
Diversification Opportunities for Lloyds Banking and Glencore Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and Glencore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Glencore plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glencore plc 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 Glencore Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glencore plc has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Glencore Plc go up and down completely randomly.
Pair Corralation between Lloyds Banking and Glencore Plc
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 16.3 times more return on investment than Glencore Plc. However, Lloyds Banking is 16.3 times more volatile than Glencore plc. It trades about 0.05 of its potential returns per unit of risk. Glencore plc is currently generating about 0.1 per unit of risk. If you would invest 4,225 in Lloyds Banking Group on August 29, 2024 and sell it today you would earn a total of 725.00 from holding Lloyds Banking Group or generate 17.16% 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. Glencore plc
Performance |
| Timeline |
| Lloyds Banking Group |
| Glencore plc |
Lloyds Banking and Glencore Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Glencore Plc
The main advantage of trading using opposite Lloyds Banking and Glencore Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Glencore Plc 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 Glencore Plc will offset losses from the drop in Glencore Plc's long position.| Lloyds Banking vs. Ross Stores | Lloyds Banking vs. Verizon Communications | Lloyds Banking vs. Delta Air Lines | Lloyds Banking vs. First Republic Bank |
| Glencore Plc vs. First Republic Bank | Glencore Plc vs. Micron Technology | Glencore Plc vs. Taiwan Semiconductor Manufacturing | Glencore Plc vs. Verizon Communications |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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