Correlation Between Lloyds Banking and Monster Beverage
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Monster Beverage 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 Monster Beverage 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 Monster Beverage Corp, you can compare the effects of market volatilities on Lloyds Banking and Monster Beverage 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 Monster Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Monster Beverage.
Diversification Opportunities for Lloyds Banking and Monster Beverage
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and Monster is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Monster Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monster Beverage Corp 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 Monster Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monster Beverage Corp has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Monster Beverage go up and down completely randomly.
Pair Corralation between Lloyds Banking and Monster Beverage
Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 0.96 times more return on investment than Monster Beverage. However, Lloyds Banking Group is 1.04 times less risky than Monster Beverage. It trades about 0.04 of its potential returns per unit of risk. Monster Beverage Corp is currently generating about 0.02 per unit of risk. If you would invest 3,775 in Lloyds Banking Group on August 28, 2024 and sell it today you would earn a total of 1,175 from holding Lloyds Banking Group or generate 31.13% 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. Monster Beverage Corp
Performance |
| Timeline |
| Lloyds Banking Group |
| Monster Beverage Corp |
Lloyds Banking and Monster Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Monster Beverage
The main advantage of trading using opposite Lloyds Banking and Monster Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Monster Beverage 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 Monster Beverage will offset losses from the drop in Monster Beverage's long position.| Lloyds Banking vs. Apple Inc | Lloyds Banking vs. Microsoft | Lloyds Banking vs. Alphabet Inc Class A | Lloyds Banking vs. Alphabet Inc |
| Monster Beverage vs. Grupo Sports World | Monster Beverage vs. DXC Technology | Monster Beverage vs. Samsung Electronics Co | Monster Beverage 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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