Correlation Between Lloyds Banking and Uniper SE

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

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

Diversification Opportunities for Lloyds Banking and Uniper SE

-0.55

Correlation Coefficient

Lloyds Banking  Uniper SE

Excellent diversification

The 3 months correlation between Lloyds and Uniper is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Lloyds Banking 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 Banking Group are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Uniper SE go up and down completely randomly.

Pair Corralation between Lloyds Banking and Uniper SE

Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 1.04 times more return on investment than Uniper SE. However, Lloyds Banking is 1.04 times more volatile than Uniper SE. It trades about 0.1 of its potential returns per unit of risk. Uniper SE is currently generating about -0.12 per unit of risk. If you would invest  7,266  in Lloyds Banking Group on April 24, 2025 and sell it today you would earn a total of  524.00  from holding Lloyds Banking Group or generate 7.21% return on investment over 90 days.

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

Lloyds Banking Group  vs.  Uniper SE

Lloyds Banking Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lloyds Banking Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Lloyds Banking may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Uniper SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uniper SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Lloyds Banking and Uniper SE

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

The idea behind Lloyds Banking Group and Uniper SE 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.