Correlation Between LLOYDS METALS and COSMO FIRST

Can any of the company-specific risk be diversified away by investing in both LLOYDS METALS and COSMO FIRST 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 COSMO FIRST 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 COSMO FIRST LIMITED, you can compare the effects of market volatilities on LLOYDS METALS and COSMO FIRST 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 COSMO FIRST. Check out your portfolio center. Please also check ongoing floating volatility patterns of LLOYDS METALS and COSMO FIRST.

Diversification Opportunities for LLOYDS METALS and COSMO FIRST

0.45

Correlation Coefficient

LLOYDS METALS  COSMO FIRST

Very weak diversification

The 3 months correlation between LLOYDS and COSMO is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding LLOYDS METALS AND and COSMO FIRST LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO FIRST 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 COSMO FIRST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO FIRST LIMITED has no effect on the direction of LLOYDS METALS i.e., LLOYDS METALS and COSMO FIRST go up and down completely randomly.

Pair Corralation between LLOYDS METALS and COSMO FIRST

Assuming the 90 days trading horizon LLOYDS METALS AND is expected to generate 0.8 times more return on investment than COSMO FIRST. However, LLOYDS METALS AND is 1.25 times less risky than COSMO FIRST. It trades about 0.0 of its potential returns per unit of risk. COSMO FIRST LIMITED is currently generating about -0.13 per unit of risk. If you would invest  105,025  in LLOYDS METALS AND on December 2, 2024 and sell it today you would lose (2,915) from holding LLOYDS METALS AND or give up 2.78% of portfolio value over 90 days.

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

LLOYDS METALS AND  vs.  COSMO FIRST LIMITED

LLOYDS METALS AND

Risk-Adjusted Performance

Very Weak

Over the last 90 days LLOYDS METALS AND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, LLOYDS METALS is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

COSMO FIRST LIMITED

Risk-Adjusted Performance

Very Weak

Over the last 90 days COSMO FIRST LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with LLOYDS METALS and COSMO FIRST

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

The idea behind LLOYDS METALS AND and COSMO FIRST 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.