Correlation Between McKesson and Lloyds Banking

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

Diversification Opportunities for McKesson and Lloyds Banking

McKessonLloydsDiversified AwayMcKessonLloydsDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between McKesson and Lloyds is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McKesson 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 McKesson 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 McKesson 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 McKesson i.e., McKesson and Lloyds Banking go up and down completely randomly.

Pair Corralation between McKesson and Lloyds Banking

If you would invest  1,010,057  in McKesson on October 20, 2024 and sell it today you would earn a total of  189,511  from holding McKesson or generate 18.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

McKesson  vs.  Lloyds Banking Group

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 510152025
JavaScript chart by amCharts 3.21.15MCK LYGN
       Timeline  
McKesson 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in McKesson are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, McKesson showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan10,50011,00011,50012,000
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. In spite of fairly 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan49.55050.5

McKesson and Lloyds Banking Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.07-5.3-3.52-1.750.02961.93.825.757.68 0.010.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15MCK LYGN
       Returns  

Pair Trading with McKesson and Lloyds Banking

The main advantage of trading using opposite McKesson and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McKesson 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 McKesson 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.