Correlation Between Lake Shore and 1895 Of
Can any of the company-specific risk be diversified away by investing in both Lake Shore and 1895 Of 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 Lake Shore and 1895 Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lake Shore Bancorp and 1895 of Wisconsin, you can compare the effects of market volatilities on Lake Shore and 1895 Of 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 Lake Shore with a short position of 1895 Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Shore and 1895 Of.
Diversification Opportunities for Lake Shore and 1895 Of
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lake and 1895 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lake Shore Bancorp and 1895 of Wisconsin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1895 of Wisconsin and Lake Shore 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 Lake Shore Bancorp are associated (or correlated) with 1895 Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1895 of Wisconsin has no effect on the direction of Lake Shore i.e., Lake Shore and 1895 Of go up and down completely randomly.
Pair Corralation between Lake Shore and 1895 Of
Given the investment horizon of 90 days Lake Shore is expected to generate 2.21 times less return on investment than 1895 Of. In addition to that, Lake Shore is 1.08 times more volatile than 1895 of Wisconsin. It trades about 0.04 of its total potential returns per unit of risk. 1895 of Wisconsin is currently generating about 0.09 per unit of volatility. If you would invest 700.00 in 1895 of Wisconsin on September 25, 2024 and sell it today you would earn a total of 304.00 from holding 1895 of Wisconsin or generate 43.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 97.92% |
Values | Daily Returns |
Lake Shore Bancorp vs. 1895 of Wisconsin
Performance |
Timeline |
Lake Shore Bancorp |
1895 of Wisconsin |
Lake Shore and 1895 Of Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lake Shore and 1895 Of
The main advantage of trading using opposite Lake Shore and 1895 Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Shore position performs unexpectedly, 1895 Of 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 1895 Of will offset losses from the drop in 1895 Of's long position.Lake Shore vs. Home Federal Bancorp | Lake Shore vs. Magyar Bancorp | Lake Shore vs. Community West Bancshares |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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