Correlation Between LLOYDS METALS and Cartrade Tech

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

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

Diversification Opportunities for LLOYDS METALS and Cartrade Tech

-0.16

Correlation Coefficient

LLOYDS METALS  Cartrade Tech

Good diversification

The 3 months correlation between LLOYDS and Cartrade is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding LLOYDS METALS AND and Cartrade Tech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartrade Tech Limited and LLOYDS METALS 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 METALS AND are associated (or correlated) with Cartrade Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartrade Tech Limited has no effect on the direction of LLOYDS METALS i.e., LLOYDS METALS and Cartrade Tech go up and down completely randomly.

Pair Corralation between LLOYDS METALS and Cartrade Tech

Assuming the 90 days trading horizon LLOYDS METALS AND is expected to generate 0.94 times more return on investment than Cartrade Tech. However, LLOYDS METALS AND is 1.07 times less risky than Cartrade Tech. It trades about 0.05 of its potential returns per unit of risk. Cartrade Tech Limited is currently generating about 0.04 per unit of risk. If you would invest  118,180  in LLOYDS METALS AND on December 27, 2024 and sell it today you would earn a total of  8,440  from holding LLOYDS METALS AND or generate 7.14% return on investment over 90 days.

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

LLOYDS METALS AND  vs.  Cartrade Tech Limited

LLOYDS METALS AND

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LLOYDS METALS AND are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, LLOYDS METALS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cartrade Tech Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cartrade Tech Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Cartrade Tech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with LLOYDS METALS and Cartrade Tech

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

The idea behind LLOYDS METALS AND and Cartrade Tech Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.