Correlation Between Walmart and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both Walmart 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 Walmart and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walmart and Lloyds Banking Group, you can compare the effects of market volatilities on Walmart 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 Walmart with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and Lloyds Banking.
Diversification Opportunities for Walmart and Lloyds Banking
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walmart and Lloyds is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Walmart 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 Walmart 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 Walmart 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 Walmart i.e., Walmart and Lloyds Banking go up and down completely randomly.
Pair Corralation between Walmart and Lloyds Banking
Considering the 90-day investment horizon Walmart is expected to generate 0.25 times more return on investment than Lloyds Banking. However, Walmart is 4.04 times less risky than Lloyds Banking. It trades about 0.15 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.04 per unit of risk. If you would invest 5,050 in Walmart on September 2, 2024 and sell it today you would earn a total of 4,200 from holding Walmart or generate 83.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.18% |
| Values | Daily Returns |
Walmart vs. Lloyds Banking Group
Performance |
| Timeline |
| Walmart |
| Lloyds Banking Group |
Walmart and Lloyds Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and Lloyds Banking
The main advantage of trading using opposite Walmart and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart 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.| Walmart vs. Costco Wholesale Corp | Walmart vs. Dollar Tree | Walmart vs. BJs Wholesale Club | Walmart vs. Target |
| Lloyds Banking vs. Piraeus Bank SA | Lloyds Banking vs. Turkiye Garanti Bankasi | Lloyds Banking vs. Uwharrie Capital 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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