Correlation Between Hospital Mater and Lloyds Banking

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hospital Mater and Lloyds Banking 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 Hospital Mater and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hospital Mater Dei and Lloyds Banking Group, you can compare the effects of market volatilities on Hospital Mater and Lloyds Banking 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 Hospital Mater with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hospital Mater and Lloyds Banking.

Diversification Opportunities for Hospital Mater and Lloyds Banking

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Hospital and Lloyds is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and Lloyds Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Banking Group and Hospital Mater 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 Hospital Mater Dei are associated (or correlated) with Lloyds Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Banking Group has no effect on the direction of Hospital Mater i.e., Hospital Mater and Lloyds Banking go up and down completely randomly.

Pair Corralation between Hospital Mater and Lloyds Banking

Assuming the 90 days trading horizon Hospital Mater Dei is expected to under-perform the Lloyds Banking. In addition to that, Hospital Mater is 1.33 times more volatile than Lloyds Banking Group. It trades about -0.1 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.11 per unit of volatility. If you would invest  1,043  in Lloyds Banking Group on October 9, 2024 and sell it today you would earn a total of  626.00  from holding Lloyds Banking Group or generate 60.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hospital Mater Dei  vs.  Lloyds Banking Group

 Performance 
       Timeline  
Hospital Mater Dei 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hospital Mater Dei has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Lloyds Banking Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lloyds Banking Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Lloyds Banking is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hospital Mater and Lloyds Banking Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hospital Mater and Lloyds Banking

The main advantage of trading using opposite Hospital Mater and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hospital Mater position performs unexpectedly, Lloyds Banking 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 Lloyds Banking will offset losses from the drop in Lloyds Banking's long position.
The idea behind Hospital Mater Dei and Lloyds Banking Group 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.
Check out your portfolio center.
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Equity Valuation
Check real value of public entities based on technical and fundamental data
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk