Correlation Between AMB Financial and Lakeland Financial

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

By analyzing existing cross correlation between AMB Financial Corp and Lakeland Financial, you can compare the effects of market volatilities on AMB Financial and Lakeland Financial 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 AMB Financial with a short position of Lakeland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMB Financial and Lakeland Financial.

Diversification Opportunities for AMB Financial and Lakeland Financial

-0.16

Correlation Coefficient

AMB Financial  Lakeland Financial

Good diversification

The 3 months correlation between AMB and Lakeland is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding AMB Financial Corp and Lakeland Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Financial and AMB Financial 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 AMB Financial Corp are associated (or correlated) with Lakeland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Financial has no effect on the direction of AMB Financial i.e., AMB Financial and Lakeland Financial go up and down completely randomly.

Pair Corralation between AMB Financial and Lakeland Financial

If you would invest  2,005  in AMB Financial Corp on October 22, 2024 and sell it today you would earn a total of  0.00  from holding AMB Financial Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

AMB Financial Corp  vs.  Lakeland Financial

AMB Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMB Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AMB Financial is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Lakeland Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lakeland Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Lakeland Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AMB Financial and Lakeland Financial

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

The idea behind AMB Financial Corp and Lakeland Financial 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..