Correlation Between LLOYDS METALS and Syrma SGS

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

By analyzing existing cross correlation between LLOYDS METALS AND and Syrma SGS Technology, you can compare the effects of market volatilities on LLOYDS METALS and Syrma SGS 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 LLOYDS METALS with a short position of Syrma SGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LLOYDS METALS and Syrma SGS.

Diversification Opportunities for LLOYDS METALS and Syrma SGS

0.52

Correlation Coefficient

LLOYDS METALS  Syrma SGS

Very weak diversification

The 3 months correlation between LLOYDS and Syrma is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding LLOYDS METALS AND and Syrma SGS Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syrma SGS Technology and LLOYDS METALS 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 LLOYDS METALS AND are associated (or correlated) with Syrma SGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syrma SGS Technology has no effect on the direction of LLOYDS METALS i.e., LLOYDS METALS and Syrma SGS go up and down completely randomly.

Pair Corralation between LLOYDS METALS and Syrma SGS

Assuming the 90 days trading horizon LLOYDS METALS AND is expected to generate 0.71 times more return on investment than Syrma SGS. However, LLOYDS METALS AND is 1.4 times less risky than Syrma SGS. It trades about 0.23 of its potential returns per unit of risk. Syrma SGS Technology is currently generating about 0.15 per unit of risk. If you would invest  84,305  in LLOYDS METALS AND on September 20, 2024 and sell it today you would earn a total of  33,530  from holding LLOYDS METALS AND or generate 39.77% return on investment over 90 days.

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

LLOYDS METALS AND  vs.  Syrma SGS Technology

LLOYDS METALS AND

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LLOYDS METALS AND are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, LLOYDS METALS displayed solid returns over the last few months and may actually be approaching a breakup point.

Syrma SGS Technology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Syrma SGS Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Syrma SGS displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LLOYDS METALS and Syrma SGS

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

The idea behind LLOYDS METALS AND and Syrma SGS Technology 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.