Correlation Between FLOW TRADERS and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Lloyds Banking Group, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Lloyds Banking.
Diversification Opportunities for FLOW TRADERS and Lloyds Banking
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between FLOW and Lloyds is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD 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 FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Lloyds Banking go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Lloyds Banking
Assuming the 90 days horizon FLOW TRADERS is expected to generate 1.83 times less return on investment than Lloyds Banking. But when comparing it to its historical volatility, FLOW TRADERS LTD is 1.06 times less risky than Lloyds Banking. It trades about 0.01 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 54.00 in Lloyds Banking Group on October 16, 2024 and sell it today you would earn a total of 9.00 from holding Lloyds Banking Group or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Lloyds Banking Group
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Lloyds Banking Group |
FLOW TRADERS and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Lloyds Banking
The main advantage of trading using opposite FLOW TRADERS and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. KIMBALL ELECTRONICS | FLOW TRADERS vs. TT Electronics PLC | FLOW TRADERS vs. Delta Electronics Public | FLOW TRADERS vs. Salesforce |
| Lloyds Banking vs. Cleanaway Waste Management | Lloyds Banking vs. Coor Service Management | Lloyds Banking vs. COPLAND ROAD CAPITAL | Lloyds Banking vs. SAFEROADS HLDGS |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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