Correlation Between Patria Investments and Lloyds Banking

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

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

Diversification Opportunities for Patria Investments and Lloyds Banking

0.6

Correlation Coefficient

Patria Investments  Lloyds Banking

Poor diversification

The 3 months correlation between Patria and Lloyds is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Patria Investments Limited and Lloyds Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lloyds Banking Group and Patria Investments 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 Patria Investments Limited are associated (or correlated) with Lloyds Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lloyds Banking Group has no effect on the direction of Patria Investments i.e., Patria Investments and Lloyds Banking go up and down completely randomly.

Pair Corralation between Patria Investments and Lloyds Banking

Assuming the 90 days trading horizon Patria Investments Limited is expected to generate 0.86 times more return on investment than Lloyds Banking. However, Patria Investments Limited is 1.16 times less risky than Lloyds Banking. It trades about 0.33 of its potential returns per unit of risk. Lloyds Banking Group is currently generating about 0.07 per unit of risk. If you would invest  2,902  in Patria Investments Limited on April 20, 2025 and sell it today you would earn a total of  886.00  from holding Patria Investments Limited or generate 30.53% return on investment over 90 days.

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

Patria Investments Limited  vs.  Lloyds Banking Group

Patria Investments

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Patria Investments Limited are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Patria Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Lloyds Banking Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lloyds Banking Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lloyds Banking may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Patria Investments and Lloyds Banking

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

The idea behind Patria Investments Limited and Lloyds Banking 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.