Correlation Between Lloyds Banking and Ikigai Ventures

Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Ikigai Ventures 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 Lloyds Banking and Ikigai Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lloyds Banking Group and Ikigai Ventures, you can compare the effects of market volatilities on Lloyds Banking and Ikigai Ventures 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 Lloyds Banking with a short position of Ikigai Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Ikigai Ventures.

Diversification Opportunities for Lloyds Banking and Ikigai Ventures

-0.47

Correlation Coefficient

Lloyds Banking  Ikigai Ventures

Very good diversification

The 3 months correlation between Lloyds and Ikigai is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Ikigai Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikigai Ventures and Lloyds Banking 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 Lloyds Banking Group are associated (or correlated) with Ikigai Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikigai Ventures has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Ikigai Ventures go up and down completely randomly.

Pair Corralation between Lloyds Banking and Ikigai Ventures

Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 1.49 times more return on investment than Ikigai Ventures. However, Lloyds Banking is 1.49 times more volatile than Ikigai Ventures. It trades about 0.27 of its potential returns per unit of risk. Ikigai Ventures is currently generating about -0.13 per unit of risk. If you would invest  5,442  in Lloyds Banking Group on December 29, 2024 and sell it today you would earn a total of  1,898  from holding Lloyds Banking Group or generate 34.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lloyds Banking Group  vs.  Ikigai Ventures

Lloyds Banking Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lloyds Banking Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lloyds Banking unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ikigai Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ikigai Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Lloyds Banking and Ikigai Ventures

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

The idea behind Lloyds Banking Group and Ikigai Ventures 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.