Correlation Between Future Retail and LLOYDS METALS

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

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

Diversification Opportunities for Future Retail and LLOYDS METALS

0.0

Correlation Coefficient

Future Retail  LLOYDS METALS

Pay attention - limited upside

The 3 months correlation between Future and LLOYDS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Future Retail 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 Future Retail 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 Future Retail 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 Future Retail i.e., Future Retail and LLOYDS METALS go up and down completely randomly.

Pair Corralation between Future Retail and LLOYDS METALS

If you would invest  116,270  in LLOYDS METALS AND on October 22, 2024 and sell it today you would earn a total of  26,085  from holding LLOYDS METALS AND or generate 22.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Future Retail Limited  vs.  LLOYDS METALS AND

Future Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Future Retail is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

LLOYDS METALS AND

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LLOYDS METALS AND are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, LLOYDS METALS displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Future Retail and LLOYDS METALS

The main advantage of trading using opposite Future Retail and LLOYDS METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future Retail 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 Future Retail 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..