Correlation Between Zedge and LLOYDS

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

By analyzing existing cross correlation between Zedge Inc and LLOYDS BKG GROUP, you can compare the effects of market volatilities on Zedge 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 Zedge with a short position of LLOYDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zedge and LLOYDS.

Diversification Opportunities for Zedge and LLOYDS

0.62

Correlation Coefficient

Zedge  LLOYDS

Poor diversification

The 3 months correlation between Zedge and LLOYDS is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Zedge Inc and LLOYDS BKG GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS BKG GROUP and Zedge 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 Zedge Inc 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 BKG GROUP has no effect on the direction of Zedge i.e., Zedge and LLOYDS go up and down completely randomly.

Pair Corralation between Zedge and LLOYDS

Given the investment horizon of 90 days Zedge Inc is expected to generate 1.91 times more return on investment than LLOYDS. However, Zedge is 1.91 times more volatile than LLOYDS BKG GROUP. It trades about -0.05 of its potential returns per unit of risk. LLOYDS BKG GROUP is currently generating about -0.16 per unit of risk. If you would invest  317.00  in Zedge Inc on September 5, 2024 and sell it today you would lose (44.00) from holding Zedge Inc or give up 13.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	75.0%
Values	Daily Returns

Zedge Inc  vs.  LLOYDS BKG GROUP

Zedge Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zedge Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

LLOYDS BKG GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LLOYDS BKG GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for LLOYDS BKG GROUP investors.

Pair Trading with Zedge and LLOYDS

The main advantage of trading using opposite Zedge and LLOYDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zedge 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 Zedge Inc and LLOYDS BKG 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.