Correlation Between Grupo Supervielle and Lloyds Banking

Can any of the company-specific risk be diversified away by investing in both Grupo Supervielle 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 Grupo Supervielle and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grupo Supervielle SA and Lloyds Banking Group, you can compare the effects of market volatilities on Grupo Supervielle 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 Grupo Supervielle with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Supervielle and Lloyds Banking.

Diversification Opportunities for Grupo Supervielle and Lloyds Banking

-0.77

Correlation Coefficient

Grupo Supervielle  Lloyds Banking

Pay attention - limited upside

The 3 months correlation between Grupo and Lloyds is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Supervielle SA 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 Grupo Supervielle 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 Grupo Supervielle SA 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 Grupo Supervielle i.e., Grupo Supervielle and Lloyds Banking go up and down completely randomly.

Pair Corralation between Grupo Supervielle and Lloyds Banking

Given the investment horizon of 90 days Grupo Supervielle SA is expected to under-perform the Lloyds Banking. In addition to that, Grupo Supervielle is 2.2 times more volatile than Lloyds Banking Group. It trades about 0.0 of its total potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.29 per unit of volatility. If you would invest  272.00  in Lloyds Banking Group on December 28, 2024 and sell it today you would earn a total of  116.00  from holding Lloyds Banking Group or generate 42.65% return on investment over 90 days.

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

Grupo Supervielle SA  vs.  Lloyds Banking Group

Grupo Supervielle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Supervielle SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Grupo Supervielle is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Lloyds Banking Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lloyds Banking Group are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Lloyds Banking reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Supervielle and Lloyds Banking

The main advantage of trading using opposite Grupo Supervielle and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Supervielle 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 Grupo Supervielle SA 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.