Correlation Between Cartrade Tech and LLOYDS METALS

Can any of the company-specific risk be diversified away by investing in both Cartrade Tech and LLOYDS METALS 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 Cartrade Tech and LLOYDS METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cartrade Tech Limited and LLOYDS METALS AND, you can compare the effects of market volatilities on Cartrade Tech and LLOYDS METALS 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 Cartrade Tech with a short position of LLOYDS METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartrade Tech and LLOYDS METALS.

Diversification Opportunities for Cartrade Tech and LLOYDS METALS

0.71

Correlation Coefficient

Cartrade Tech  LLOYDS METALS

Poor diversification

The 3 months correlation between Cartrade and LLOYDS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cartrade Tech Limited and LLOYDS METALS AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS METALS AND and Cartrade Tech 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 Cartrade Tech Limited are associated (or correlated) with LLOYDS METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LLOYDS METALS AND has no effect on the direction of Cartrade Tech i.e., Cartrade Tech and LLOYDS METALS go up and down completely randomly.

Pair Corralation between Cartrade Tech and LLOYDS METALS

Assuming the 90 days trading horizon Cartrade Tech is expected to generate 1.04 times less return on investment than LLOYDS METALS. In addition to that, Cartrade Tech is 1.22 times more volatile than LLOYDS METALS AND. It trades about 0.09 of its total potential returns per unit of risk. LLOYDS METALS AND is currently generating about 0.11 per unit of volatility. If you would invest  56,256  in LLOYDS METALS AND on October 24, 2024 and sell it today you would earn a total of  85,159  from holding LLOYDS METALS AND or generate 151.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	76.91%
Values	Daily Returns

Cartrade Tech Limited  vs.  LLOYDS METALS AND

Cartrade Tech Limited

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cartrade Tech Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Cartrade Tech exhibited solid returns over the last few months and may actually be approaching a breakup point.

LLOYDS METALS AND

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LLOYDS METALS AND are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, LLOYDS METALS displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cartrade Tech and LLOYDS METALS

The main advantage of trading using opposite Cartrade Tech and LLOYDS METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartrade Tech position performs unexpectedly, LLOYDS METALS 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 METALS will offset losses from the drop in LLOYDS METALS's long position.

The idea behind Cartrade Tech Limited and LLOYDS METALS AND pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.