Correlation Between Lloyds Banking and Agrometal SAI

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

Diversification Opportunities for Lloyds Banking and Agrometal SAI

-0.05

Correlation Coefficient

Lloyds Banking  Agrometal SAI

Good diversification

The 3 months correlation between Lloyds and Agrometal is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI 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 Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Lloyds Banking i.e., Lloyds Banking and Agrometal SAI go up and down completely randomly.

Pair Corralation between Lloyds Banking and Agrometal SAI

Assuming the 90 days trading horizon Lloyds Banking Group is expected to generate 0.46 times more return on investment than Agrometal SAI. However, Lloyds Banking Group is 2.16 times less risky than Agrometal SAI. It trades about 0.25 of its potential returns per unit of risk. Agrometal SAI is currently generating about 0.04 per unit of risk. If you would invest  231,500  in Lloyds Banking Group on May 6, 2025 and sell it today you would earn a total of  68,500  from holding Lloyds Banking Group or generate 29.59% return on investment over 90 days.

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

Lloyds Banking Group  vs.  Agrometal SAI

Lloyds Banking Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lloyds Banking Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Lloyds Banking sustained solid returns over the last few months and may actually be approaching a breakup point.

Agrometal SAI

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agrometal SAI are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Agrometal SAI may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Lloyds Banking and Agrometal SAI

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

The idea behind Lloyds Banking Group and Agrometal SAI 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 Global Correlations module to find global opportunities by holding instruments from different markets.