Correlation Between Supermarket Income and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Supermarket Income 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 Supermarket Income and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermarket Income REIT and Lloyds Banking Group, you can compare the effects of market volatilities on Supermarket Income 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 Supermarket Income with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Lloyds Banking.
Diversification Opportunities for Supermarket Income and Lloyds Banking
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Supermarket and Lloyds is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT 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 Supermarket Income 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 Supermarket Income REIT 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 Supermarket Income i.e., Supermarket Income and Lloyds Banking go up and down completely randomly.
Pair Corralation between Supermarket Income and Lloyds Banking
Assuming the 90 days trading horizon Supermarket Income REIT is expected to under-perform the Lloyds Banking. In addition to that, Supermarket Income is 3.55 times more volatile than Lloyds Banking Group. It trades about -0.04 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.05 per unit of volatility. If you would invest 12,484 in Lloyds Banking Group on October 15, 2024 and sell it today you would earn a total of 1,466 from holding Lloyds Banking Group or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supermarket Income REIT vs. Lloyds Banking Group
Performance |
| Timeline |
| Supermarket Income REIT |
| Lloyds Banking Group |
Supermarket Income and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Lloyds Banking
The main advantage of trading using opposite Supermarket Income and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income 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.| Supermarket Income vs. Qurate Retail Series | Supermarket Income vs. LPKF Laser Electronics | Supermarket Income vs. STMicroelectronics NV | Supermarket Income vs. Beazer Homes USA |
| Lloyds Banking vs. Vitec Software Group | Lloyds Banking vs. Aptitude Software Group | Lloyds Banking vs. Polar Capital Technology | Lloyds Banking vs. Monster Beverage Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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