Correlation Between LLOYDS METALS and Lloyds Enterprises

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

Diversification Opportunities for LLOYDS METALS and Lloyds Enterprises

0.89

Correlation Coefficient

LLOYDS METALS  Lloyds Enterprises

Very poor diversification

The 3 months correlation between LLOYDS and Lloyds is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding LLOYDS METALS AND and Lloyds Enterprises Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Enterprises 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 Lloyds Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Enterprises has no effect on the direction of LLOYDS METALS i.e., LLOYDS METALS and Lloyds Enterprises go up and down completely randomly.

Pair Corralation between LLOYDS METALS and Lloyds Enterprises

Assuming the 90 days trading horizon LLOYDS METALS is expected to generate 3.42 times less return on investment than Lloyds Enterprises. But when comparing it to its historical volatility, LLOYDS METALS AND is 1.73 times less risky than Lloyds Enterprises. It trades about 0.09 of its potential returns per unit of risk. Lloyds Enterprises Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5,492  in Lloyds Enterprises Limited on April 22, 2025 and sell it today you would earn a total of  2,578  from holding Lloyds Enterprises Limited or generate 46.94% return on investment over 90 days.

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

LLOYDS METALS AND  vs.  Lloyds Enterprises Limited

LLOYDS METALS AND

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LLOYDS METALS AND are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, LLOYDS METALS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

Pair Trading with LLOYDS METALS and Lloyds Enterprises

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

The idea behind LLOYDS METALS AND and Lloyds Enterprises Limited 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.