Correlation Between Territorial Bancorp and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Territorial Bancorp 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 Territorial Bancorp and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Territorial Bancorp and Lloyds Banking Group, you can compare the effects of market volatilities on Territorial Bancorp 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 Territorial Bancorp with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Territorial Bancorp and Lloyds Banking.
Diversification Opportunities for Territorial Bancorp and Lloyds Banking
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Territorial and Lloyds is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Territorial Bancorp 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 Territorial Bancorp 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 Territorial Bancorp 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 Territorial Bancorp i.e., Territorial Bancorp and Lloyds Banking go up and down completely randomly.
Pair Corralation between Territorial Bancorp and Lloyds Banking
Given the investment horizon of 90 days Territorial Bancorp is expected to under-perform the Lloyds Banking. But the stock apears to be less risky and, when comparing its historical volatility, Territorial Bancorp is 1.77 times less risky than Lloyds Banking. The stock trades about -0.03 of its potential returns per unit of risk. The Lloyds Banking Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 53.00 in Lloyds Banking Group on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Lloyds Banking Group or generate 24.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.86% |
| Values | Daily Returns |
Territorial Bancorp vs. Lloyds Banking Group
Performance |
| Timeline |
| Territorial Bancorp |
| Lloyds Banking Group |
Territorial Bancorp and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Territorial Bancorp and Lloyds Banking
The main advantage of trading using opposite Territorial Bancorp and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Territorial Bancorp 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.| Territorial Bancorp vs. First Hawaiian | Territorial Bancorp vs. Bank of Hawaii | Territorial Bancorp vs. Financial Institutions | Territorial Bancorp vs. Heritage Financial |
| Lloyds Banking vs. First Hawaiian | Lloyds Banking vs. Central Pacific Financial | Lloyds Banking vs. Territorial Bancorp | Lloyds Banking vs. Comerica |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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