Correlation Between G5 Entertainment and Lloyds Banking
Can any of the company-specific risk be diversified away by investing in both G5 Entertainment 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 G5 Entertainment and Lloyds Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G5 Entertainment AB and Lloyds Banking Group, you can compare the effects of market volatilities on G5 Entertainment 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 G5 Entertainment with a short position of Lloyds Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of G5 Entertainment and Lloyds Banking.
Diversification Opportunities for G5 Entertainment and Lloyds Banking
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 0QUS and Lloyds is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding G5 Entertainment AB 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 G5 Entertainment 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 G5 Entertainment AB 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 G5 Entertainment i.e., G5 Entertainment and Lloyds Banking go up and down completely randomly.
Pair Corralation between G5 Entertainment and Lloyds Banking
Assuming the 90 days trading horizon G5 Entertainment AB is expected to generate 1.4 times more return on investment than Lloyds Banking. However, G5 Entertainment is 1.4 times more volatile than Lloyds Banking Group. It trades about 0.13 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about -0.08 per unit of risk. If you would invest 9,010 in G5 Entertainment AB on September 24, 2024 and sell it today you would earn a total of 1,690 from holding G5 Entertainment AB or generate 18.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
G5 Entertainment AB vs. Lloyds Banking Group
Performance |
Timeline |
G5 Entertainment |
Lloyds Banking Group |
G5 Entertainment and Lloyds Banking Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with G5 Entertainment and Lloyds Banking
The main advantage of trading using opposite G5 Entertainment and Lloyds Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G5 Entertainment 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.G5 Entertainment vs. Uniper SE | G5 Entertainment vs. Mulberry Group PLC | G5 Entertainment vs. London Security Plc | G5 Entertainment vs. Triad Group PLC |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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