Correlation Between Lakeland Financial and Alpine Banks

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

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

Diversification Opportunities for Lakeland Financial and Alpine Banks

0.86

Correlation Coefficient

Lakeland Financial  Alpine Banks

Very poor diversification

The 3 months correlation between Lakeland and Alpine is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Financial and Alpine Banks of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Banks and Lakeland 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 Lakeland Financial are associated (or correlated) with Alpine Banks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Banks has no effect on the direction of Lakeland Financial i.e., Lakeland Financial and Alpine Banks go up and down completely randomly.

Pair Corralation between Lakeland Financial and Alpine Banks

Given the investment horizon of 90 days Lakeland Financial is expected to generate 1.53 times less return on investment than Alpine Banks. In addition to that, Lakeland Financial is 2.87 times more volatile than Alpine Banks of. It trades about 0.08 of its total potential returns per unit of risk. Alpine Banks of is currently generating about 0.33 per unit of volatility. If you would invest  2,876  in Alpine Banks of on September 15, 2024 and sell it today you would earn a total of  549.00  from holding Alpine Banks of or generate 19.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Lakeland Financial  vs.  Alpine Banks of

Lakeland Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lakeland Financial are ranked lower than 5 (%) 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 January 2025.

Alpine Banks

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Alpine Banks of are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Alpine Banks sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lakeland Financial and Alpine Banks

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

The idea behind Lakeland Financial and Alpine Banks of 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.