Correlation Between First Guaranty and Lakeland Bancorp
Can any of the company-specific risk be diversified away by investing in both First Guaranty and Lakeland Bancorp 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 First Guaranty and Lakeland Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Guaranty Bancshares and Lakeland Bancorp, you can compare the effects of market volatilities on First Guaranty and Lakeland Bancorp 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 First Guaranty with a short position of Lakeland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Guaranty and Lakeland Bancorp.
Diversification Opportunities for First Guaranty and Lakeland Bancorp
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Lakeland is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding First Guaranty Bancshares and Lakeland Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Bancorp and First Guaranty 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 First Guaranty Bancshares are associated (or correlated) with Lakeland Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Bancorp has no effect on the direction of First Guaranty i.e., First Guaranty and Lakeland Bancorp go up and down completely randomly.
Pair Corralation between First Guaranty and Lakeland Bancorp
If you would invest 1,057 in First Guaranty Bancshares on September 14, 2024 and sell it today you would earn a total of 223.00 from holding First Guaranty Bancshares or generate 21.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 1.56% |
Values | Daily Returns |
First Guaranty Bancshares vs. Lakeland Bancorp
Performance |
Timeline |
First Guaranty Bancshares |
Lakeland Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Guaranty and Lakeland Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Guaranty and Lakeland Bancorp
The main advantage of trading using opposite First Guaranty and Lakeland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Guaranty position performs unexpectedly, Lakeland Bancorp 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 Bancorp will offset losses from the drop in Lakeland Bancorp's long position.First Guaranty vs. Community West Bancshares | First Guaranty vs. First Northwest Bancorp | First Guaranty vs. First Financial Northwest | First Guaranty vs. Great Southern Bancorp |
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Check out your portfolio center.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 Valuation module to check real value of public entities based on technical and fundamental data.
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