Correlation Between Lloyds Enterprises and Par Drugs

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

By analyzing existing cross correlation between Lloyds Enterprises Limited and Par Drugs And, you can compare the effects of market volatilities on Lloyds Enterprises and Par Drugs 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 Enterprises with a short position of Par Drugs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Enterprises and Par Drugs.

Diversification Opportunities for Lloyds Enterprises and Par Drugs

-0.54

Correlation Coefficient

Lloyds Enterprises  Par Drugs

Excellent diversification

The 3 months correlation between Lloyds and Par is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Enterprises Limited and Par Drugs And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Par Drugs And and Lloyds Enterprises 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 Enterprises Limited are associated (or correlated) with Par Drugs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Par Drugs And has no effect on the direction of Lloyds Enterprises i.e., Lloyds Enterprises and Par Drugs go up and down completely randomly.

Pair Corralation between Lloyds Enterprises and Par Drugs

Assuming the 90 days trading horizon Lloyds Enterprises Limited is expected to generate 2.11 times more return on investment than Par Drugs. However, Lloyds Enterprises is 2.11 times more volatile than Par Drugs And. It trades about 0.18 of its potential returns per unit of risk. Par Drugs And is currently generating about 0.07 per unit of risk. If you would invest  5,493  in Lloyds Enterprises Limited on April 24, 2025 and sell it today you would earn a total of  2,681  from holding Lloyds Enterprises Limited or generate 48.81% return on investment over 90 days.

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

Lloyds Enterprises Limited  vs.  Par Drugs And

Lloyds Enterprises

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lloyds Enterprises Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Lloyds Enterprises exhibited solid returns over the last few months and may actually be approaching a breakup point.

Par Drugs And

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Par Drugs And are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Par Drugs may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Lloyds Enterprises and Par Drugs

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

The idea behind Lloyds Enterprises Limited and Par Drugs And 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.