Correlation Between LLOYDS METALS and SBI Cards

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

Diversification Opportunities for LLOYDS METALS and SBI Cards

-0.47

Correlation Coefficient

LLOYDS METALS  SBI Cards

Very good diversification

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

Pair Corralation between LLOYDS METALS and SBI Cards

Assuming the 90 days trading horizon LLOYDS METALS is expected to generate 1.69 times less return on investment than SBI Cards. In addition to that, LLOYDS METALS is 1.96 times more volatile than SBI Cards and. It trades about 0.06 of its total potential returns per unit of risk. SBI Cards and is currently generating about 0.2 per unit of volatility. If you would invest  69,383  in SBI Cards and on December 24, 2024 and sell it today you would earn a total of  16,367  from holding SBI Cards and or generate 23.59% return on investment over 90 days.

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

LLOYDS METALS AND  vs.  SBI Cards and

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 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, LLOYDS METALS displayed solid returns over the last few months and may actually be approaching a breakup point.

SBI Cards

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Cards and are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, SBI Cards exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LLOYDS METALS and SBI Cards

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

The idea behind LLOYDS METALS AND and SBI Cards 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.