Correlation Between Lloyds Banking and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and IShares Trust 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 IShares Trust 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 iShares Trust , you can compare the effects of market volatilities on Lloyds Banking and IShares Trust 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and IShares Trust.
Diversification Opportunities for Lloyds Banking and IShares Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and IShares Trust go up and down completely randomly.
Pair Corralation between Lloyds Banking and IShares Trust
Assuming the 90 days trading horizon Lloyds Banking is expected to generate 2.12 times less return on investment than IShares Trust. In addition to that, Lloyds Banking is 1.42 times more volatile than iShares Trust . It trades about 0.05 of its total potential returns per unit of risk. iShares Trust is currently generating about 0.14 per unit of volatility. If you would invest 217,894 in iShares Trust on August 29, 2024 and sell it today you would earn a total of 112,106 from holding iShares Trust or generate 51.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Lloyds Banking Group vs. iShares Trust
Performance |
| Timeline |
| Lloyds Banking Group |
| iShares Trust |
Lloyds Banking and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and IShares Trust
The main advantage of trading using opposite Lloyds Banking and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust'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 |
| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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