Correlation Between Lewis Clark and Washington Business

Can any of the company-specific risk be diversified away by investing in both Lewis Clark and Washington Business 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 Lewis Clark and Washington Business into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lewis Clark Bancorp and Washington Business Bank, you can compare the effects of market volatilities on Lewis Clark and Washington Business 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 Lewis Clark with a short position of Washington Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lewis Clark and Washington Business.

Diversification Opportunities for Lewis Clark and Washington Business

0.0

Correlation Coefficient

Lewis Clark  Washington Business

Pay attention - limited upside

The 3 months correlation between Lewis and Washington is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lewis Clark Bancorp and Washington Business Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Business Bank and Lewis Clark 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 Lewis Clark Bancorp are associated (or correlated) with Washington Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Business Bank has no effect on the direction of Lewis Clark i.e., Lewis Clark and Washington Business go up and down completely randomly.

Pair Corralation between Lewis Clark and Washington Business

If you would invest  3,005  in Lewis Clark Bancorp on December 20, 2024 and sell it today you would earn a total of  224.00  from holding Lewis Clark Bancorp or generate 7.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lewis Clark Bancorp  vs.  Washington Business Bank

Lewis Clark Bancorp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lewis Clark Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Lewis Clark may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Washington Business Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Washington Business Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Washington Business is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lewis Clark and Washington Business

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

The idea behind Lewis Clark Bancorp and Washington Business Bank 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 Global Correlations module to find global opportunities by holding instruments from different markets.