Correlation Between PagSeguro Digital and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both PagSeguro Digital 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 PagSeguro Digital and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PagSeguro Digital and Lloyds Banking Group, you can compare the effects of market volatilities on PagSeguro Digital 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 PagSeguro Digital with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of PagSeguro Digital and Lloyds Banking.
Diversification Opportunities for PagSeguro Digital and Lloyds Banking
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between PagSeguro and Lloyds is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PagSeguro Digital 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 PagSeguro Digital 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 PagSeguro Digital 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 PagSeguro Digital i.e., PagSeguro Digital and Lloyds Banking go up and down completely randomly.
Pair Corralation between PagSeguro Digital and Lloyds Banking
Assuming the 90 days trading horizon PagSeguro Digital is expected to under-perform the Lloyds Banking. In addition to that, PagSeguro Digital is 2.21 times more volatile than Lloyds Banking Group. It trades about -0.07 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about -0.1 per unit of volatility. If you would invest 1,634 in Lloyds Banking Group on August 30, 2024 and sell it today you would lose (54.00) from holding Lloyds Banking Group or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
PagSeguro Digital vs. Lloyds Banking Group
Performance |
| Timeline |
| PagSeguro Digital |
| Lloyds Banking Group |
PagSeguro Digital and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PagSeguro Digital and Lloyds Banking
The main advantage of trading using opposite PagSeguro Digital and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PagSeguro Digital 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.| PagSeguro Digital vs. T Mobile | PagSeguro Digital vs. Ameriprise Financial | PagSeguro Digital vs. Mitsubishi UFJ Financial | PagSeguro Digital vs. Extra Space Storage |
| Lloyds Banking vs. Zoom Video Communications | Lloyds Banking vs. GP Investments | Lloyds Banking vs. Broadcom | Lloyds Banking vs. United States Steel |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |