Correlation Between LLOYDS METALS and Orient Technologies

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

Diversification Opportunities for LLOYDS METALS and Orient Technologies

0.84

Correlation Coefficient

LLOYDS METALS  Orient Technologies

Very poor diversification

The 3 months correlation between LLOYDS and Orient is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding LLOYDS METALS AND and Orient Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Technologies 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 Orient Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Technologies has no effect on the direction of LLOYDS METALS i.e., LLOYDS METALS and Orient Technologies go up and down completely randomly.

Pair Corralation between LLOYDS METALS and Orient Technologies

Assuming the 90 days trading horizon LLOYDS METALS AND is expected to generate 0.83 times more return on investment than Orient Technologies. However, LLOYDS METALS AND is 1.21 times less risky than Orient Technologies. It trades about 0.04 of its potential returns per unit of risk. Orient Technologies Limited is currently generating about -0.08 per unit of risk. If you would invest  121,515  in LLOYDS METALS AND on December 28, 2024 and sell it today you would earn a total of  7,300  from holding LLOYDS METALS AND or generate 6.01% return on investment over 90 days.

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

LLOYDS METALS AND  vs.  Orient Technologies 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 unfluctuating basic indicators, LLOYDS METALS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Orient Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orient Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with LLOYDS METALS and Orient Technologies

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

The idea behind LLOYDS METALS AND and Orient Technologies 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.