Correlation Between Sturgis Bancorp and Lyons Bancorp

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

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

Diversification Opportunities for Sturgis Bancorp and Lyons Bancorp

0.0

Correlation Coefficient

Sturgis Bancorp  Lyons Bancorp

Pay attention - limited upside

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

Pair Corralation between Sturgis Bancorp and Lyons Bancorp

If you would invest  4,101  in Lyons Bancorp on December 4, 2024 and sell it today you would lose (1.00) from holding Lyons Bancorp or give up 0.02% of portfolio value over 90 days.

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

Sturgis Bancorp  vs.  Lyons Bancorp

Sturgis Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sturgis Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Sturgis Bancorp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Lyons Bancorp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lyons Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Lyons Bancorp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sturgis Bancorp and Lyons Bancorp

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

The idea behind Sturgis Bancorp and Lyons Bancorp 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.