Correlation Between Lloyds Banking and Petrleo Brasileiro
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Petrleo Brasileiro 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 Petrleo Brasileiro 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 Petrleo Brasileiro SA, you can compare the effects of market volatilities on Lloyds Banking and Petrleo Brasileiro 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 Petrleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Petrleo Brasileiro.
Diversification Opportunities for Lloyds Banking and Petrleo Brasileiro
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and Petrleo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Petrleo Brasileiro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrleo Brasileiro 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 Petrleo Brasileiro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrleo Brasileiro has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Petrleo Brasileiro go up and down completely randomly.
Pair Corralation between Lloyds Banking and Petrleo Brasileiro
If you would invest 27,400 in Petrleo Brasileiro SA on August 27, 2024 and sell it today you would earn a total of 3,245 from holding Petrleo Brasileiro SA or generate 11.84% 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. Petrleo Brasileiro SA
Performance |
| Timeline |
| Lloyds Banking Group |
| Petrleo Brasileiro |
Lloyds Banking and Petrleo Brasileiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Petrleo Brasileiro
The main advantage of trading using opposite Lloyds Banking and Petrleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking position performs unexpectedly, Petrleo Brasileiro 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 Petrleo Brasileiro will offset losses from the drop in Petrleo Brasileiro's long position.| Lloyds Banking vs. Apple Inc | Lloyds Banking vs. Microsoft | Lloyds Banking vs. Alphabet Inc Class A | Lloyds Banking vs. Alphabet Inc |
| Petrleo Brasileiro vs. GMxico Transportes SAB | Petrleo Brasileiro vs. FIBRA Storage | Petrleo Brasileiro vs. Ross Stores | Petrleo Brasileiro 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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