Correlation Between Invesco Physical and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Invesco Physical 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 Invesco Physical and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Physical Gold and Lloyds Banking Group, you can compare the effects of market volatilities on Invesco Physical 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 Invesco Physical with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Physical and Lloyds Banking.
Diversification Opportunities for Invesco Physical and Lloyds Banking
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invesco and Lloyds is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Physical Gold 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 Invesco Physical 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 Invesco Physical Gold 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 Invesco Physical i.e., Invesco Physical and Lloyds Banking go up and down completely randomly.
Pair Corralation between Invesco Physical and Lloyds Banking
Assuming the 90 days trading horizon Invesco Physical Gold is expected to generate 5.07 times more return on investment than Lloyds Banking. However, Invesco Physical is 5.07 times more volatile than Lloyds Banking Group. It trades about 0.14 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.46 per unit of risk. If you would invest 1,967,300 in Invesco Physical Gold on September 14, 2024 and sell it today you would earn a total of 63,900 from holding Invesco Physical Gold or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Physical Gold vs. Lloyds Banking Group
Performance |
| Timeline |
| Invesco Physical Gold |
| Lloyds Banking Group |
Invesco Physical and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Physical and Lloyds Banking
The main advantage of trading using opposite Invesco Physical and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Physical 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.| Invesco Physical vs. Lloyds Banking Group | Invesco Physical vs. St Galler Kantonalbank | Invesco Physical vs. Regions Financial Corp | Invesco Physical vs. MT Bank Corp |
| Lloyds Banking vs. Liontrust Asset Management | Lloyds Banking vs. Erste Group Bank | Lloyds Banking vs. Smithson Investment Trust | Lloyds Banking vs. Aberdeen Diversified Income |
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 CEOs Directory module to screen CEOs from public companies around the world.
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