Correlation Between Lloyds Banking and Flowtech Fluidpower

Can any of the company-specific risk be diversified away by investing in both Lloyds Banking and Flowtech Fluidpower 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 Flowtech Fluidpower 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 Flowtech Fluidpower plc, you can compare the effects of market volatilities on Lloyds Banking and Flowtech Fluidpower 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 Flowtech Fluidpower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Flowtech Fluidpower.

Diversification Opportunities for Lloyds Banking and Flowtech Fluidpower

0.37

Correlation Coefficient

Lloyds Banking  Flowtech Fluidpower

Weak diversification

The 3 months correlation between Lloyds and Flowtech is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Flowtech Fluidpower plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowtech Fluidpower plc 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 Flowtech Fluidpower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowtech Fluidpower plc has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Flowtech Fluidpower go up and down completely randomly.

Pair Corralation between Lloyds Banking and Flowtech Fluidpower

If you would invest (100.00) in Lloyds Banking Group on April 19, 2025 and sell it today you would earn a total of  100.00  from holding Lloyds Banking Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Lloyds Banking Group  vs.  Flowtech Fluidpower plc

Lloyds Banking Group

Risk-Adjusted Performance

OK

Over the last 90 days Lloyds Banking Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Lloyds Banking may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Flowtech Fluidpower plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flowtech Fluidpower plc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Flowtech Fluidpower exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lloyds Banking and Flowtech Fluidpower

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

The idea behind Lloyds Banking Group and Flowtech Fluidpower plc 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 Stocks Directory module to find actively traded stocks across global markets.