Correlation Between Community Heritage and Lewis Clark

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

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

Diversification Opportunities for Community Heritage and Lewis Clark

0.77

Correlation Coefficient

Community Heritage  Lewis Clark

Poor diversification

The 3 months correlation between Community and Lewis is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Community Heritage Financial and Lewis Clark Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lewis Clark Bancorp and Community Heritage 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 Community Heritage Financial are associated (or correlated) with Lewis Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lewis Clark Bancorp has no effect on the direction of Community Heritage i.e., Community Heritage and Lewis Clark go up and down completely randomly.

Pair Corralation between Community Heritage and Lewis Clark

If you would invest  2,400  in Community Heritage Financial on October 27, 2024 and sell it today you would earn a total of  0.00  from holding Community Heritage Financial or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.48%
Values	Daily Returns

Community Heritage Financial  vs.  Lewis Clark Bancorp

Community Heritage

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Community Heritage Financial are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical indicators, Community Heritage reported solid returns over the last few months and may actually be approaching a breakup point.

Lewis Clark Bancorp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lewis Clark Bancorp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Lewis Clark may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Community Heritage and Lewis Clark

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

The idea behind Community Heritage Financial and Lewis Clark Bancorp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.