Correlation Between Lake Shore and Bancorp 34

Can any of the company-specific risk be diversified away by investing in both Lake Shore and Bancorp 34 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 Bancorp 34 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 Bancorp 34, you can compare the effects of market volatilities on Lake Shore and Bancorp 34 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 Bancorp 34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Shore and Bancorp 34.

Diversification Opportunities for Lake Shore and Bancorp 34

0.05

Correlation Coefficient

Lake Shore  Bancorp 34

Significant diversification

The 3 months correlation between Lake and Bancorp is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lake Shore Bancorp and Bancorp 34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancorp 34 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 Bancorp 34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancorp 34 has no effect on the direction of Lake Shore i.e., Lake Shore and Bancorp 34 go up and down completely randomly.

Pair Corralation between Lake Shore and Bancorp 34

If you would invest  1,315  in Bancorp 34 on September 21, 2024 and sell it today you would earn a total of  0.00  from holding Bancorp 34 or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

Lake Shore Bancorp  vs.  Bancorp 34

Lake Shore Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lake Shore Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Lake Shore is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bancorp 34

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bancorp 34 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Bancorp 34 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lake Shore and Bancorp 34

The main advantage of trading using opposite Lake Shore and Bancorp 34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Shore position performs unexpectedly, Bancorp 34 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 Bancorp 34 will offset losses from the drop in Bancorp 34's long position.

The idea behind Lake Shore Bancorp and Bancorp 34 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.