Correlation Between NYSE Composite and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Lloyds Banking 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 NYSE Composite and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lloyds Banking Group, you can compare the effects of market volatilities on NYSE Composite and Lloyds Banking 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 NYSE Composite with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lloyds Banking.
Diversification Opportunities for NYSE Composite and Lloyds Banking
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Lloyds is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lloyds Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Banking Group and NYSE Composite 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 NYSE Composite are associated (or correlated) with Lloyds Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Banking Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and Lloyds Banking go up and down completely randomly.
Pair Corralation between NYSE Composite and Lloyds Banking
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.27 times more return on investment than Lloyds Banking. However, NYSE Composite is 3.65 times less risky than Lloyds Banking. It trades about 0.11 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about -0.26 per unit of risk. If you would invest 1,966,458 in NYSE Composite on August 23, 2024 and sell it today you would earn a total of 30,372 from holding NYSE Composite or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Lloyds Banking Group
Performance |
| Timeline |
NYSE Composite and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lloyds Banking Group
Pair trading matchups for Lloyds Banking
Pair Trading with NYSE Composite and Lloyds Banking
The main advantage of trading using opposite NYSE Composite and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Lloyds Banking 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 Lloyds Banking will offset losses from the drop in Lloyds Banking's long position.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
| Lloyds Banking vs. Itau Unibanco Banco | Lloyds Banking vs. Grupo Financiero Galicia | Lloyds Banking vs. Banco Macro SA | Lloyds Banking vs. Banco Santander Brasil |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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