Correlation Between Armada Hflr and LLOYDS

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

By analyzing existing cross correlation between Armada Hflr Pr and LLOYDS 4976 11 AUG 33, you can compare the effects of market volatilities on Armada Hflr and LLOYDS 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 Armada Hflr with a short position of LLOYDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and LLOYDS.

Diversification Opportunities for Armada Hflr and LLOYDS

0.14

Correlation Coefficient

Armada Hflr  LLOYDS

Average diversification

The 3 months correlation between Armada and LLOYDS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and LLOYDS 4976 11 AUG 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS 4976 11 and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with LLOYDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LLOYDS 4976 11 has no effect on the direction of Armada Hflr i.e., Armada Hflr and LLOYDS go up and down completely randomly.

Pair Corralation between Armada Hflr and LLOYDS

Considering the 90-day investment horizon Armada Hflr Pr is expected to under-perform the LLOYDS. In addition to that, Armada Hflr is 3.68 times more volatile than LLOYDS 4976 11 AUG 33. It trades about -0.08 of its total potential returns per unit of risk. LLOYDS 4976 11 AUG 33 is currently generating about -0.11 per unit of volatility. If you would invest  10,107  in LLOYDS 4976 11 AUG 33 on September 14, 2024 and sell it today you would lose (256.00) from holding LLOYDS 4976 11 AUG 33 or give up 2.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	87.3%
Values	Daily Returns

Armada Hflr Pr  vs.  LLOYDS 4976 11 AUG 33

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

LLOYDS 4976 11

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LLOYDS 4976 11 AUG 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LLOYDS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and LLOYDS

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

The idea behind Armada Hflr Pr and LLOYDS 4976 11 AUG 33 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .