Correlation Between Lakeland Bancorp and Community West
Can any of the company-specific risk be diversified away by investing in both Lakeland Bancorp and Community West 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 Lakeland Bancorp and Community West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeland Bancorp and Community West Bancshares, you can compare the effects of market volatilities on Lakeland Bancorp and Community West 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 Lakeland Bancorp with a short position of Community West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeland Bancorp and Community West.
Diversification Opportunities for Lakeland Bancorp and Community West
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lakeland and Community is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Bancorp and Community West Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community West Bancshares and Lakeland Bancorp 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 Lakeland Bancorp are associated (or correlated) with Community West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community West Bancshares has no effect on the direction of Lakeland Bancorp i.e., Lakeland Bancorp and Community West go up and down completely randomly.
Pair Corralation between Lakeland Bancorp and Community West
If you would invest 2,000 in Community West Bancshares on September 13, 2024 and sell it today you would earn a total of 160.00 from holding Community West Bancshares or generate 8.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 1.56% |
Values | Daily Returns |
Lakeland Bancorp vs. Community West Bancshares
Performance |
Timeline |
Lakeland Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Community West Bancshares |
Lakeland Bancorp and Community West Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lakeland Bancorp and Community West
The main advantage of trading using opposite Lakeland Bancorp and Community West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Bancorp position performs unexpectedly, Community West 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 Community West will offset losses from the drop in Community West's long position.Lakeland Bancorp vs. Peoples Bancorp | Lakeland Bancorp vs. Primis Financial Corp | Lakeland Bancorp vs. ConnectOne Bancorp | Lakeland Bancorp vs. LINKBANCORP |
Community West vs. Home Federal Bancorp | Community West vs. Magyar Bancorp | Community West vs. First Northwest Bancorp | Community West vs. First Financial Northwest |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |