Correlation Between LLOYDS METALS and ABM International

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

Diversification Opportunities for LLOYDS METALS and ABM International

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between LLOYDS and ABM is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding LLOYDS METALS AND and ABM International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABM International 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 ABM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABM International has no effect on the direction of LLOYDS METALS i.e., LLOYDS METALS and ABM International go up and down completely randomly.

Pair Corralation between LLOYDS METALS and ABM International

Assuming the 90 days trading horizon LLOYDS METALS AND is expected to generate 0.53 times more return on investment than ABM International. However, LLOYDS METALS AND is 1.9 times less risky than ABM International. It trades about -0.12 of its potential returns per unit of risk. ABM International Limited is currently generating about -0.09 per unit of risk. If you would invest  152,940  in LLOYDS METALS AND on July 20, 2025 and sell it today you would lose (20,600) from holding LLOYDS METALS AND or give up 13.47% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

LLOYDS METALS AND  vs.  ABM International Limited

 Performance 
       Timeline  
LLOYDS METALS AND 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days LLOYDS METALS AND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
ABM International 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days ABM International Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in November 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

LLOYDS METALS and ABM International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with LLOYDS METALS and ABM International

The main advantage of trading using opposite LLOYDS METALS and ABM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LLOYDS METALS position performs unexpectedly, ABM International 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 ABM International will offset losses from the drop in ABM International's long position.
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The idea behind LLOYDS METALS AND and ABM International 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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