Correlation Between Affinity Bancshares and LCNB
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares and LCNB 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 Affinity Bancshares and LCNB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and LCNB Corporation, you can compare the effects of market volatilities on Affinity Bancshares and LCNB 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 Affinity Bancshares with a short position of LCNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and LCNB.
Diversification Opportunities for Affinity Bancshares and LCNB
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Affinity and LCNB is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and LCNB Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LCNB and Affinity Bancshares 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 Affinity Bancshares are associated (or correlated) with LCNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LCNB has no effect on the direction of Affinity Bancshares i.e., Affinity Bancshares and LCNB go up and down completely randomly.
Pair Corralation between Affinity Bancshares and LCNB
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 1.1 times less return on investment than LCNB. But when comparing it to its historical volatility, Affinity Bancshares is 1.08 times less risky than LCNB. It trades about 0.1 of its potential returns per unit of risk. LCNB Corporation is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,366 in LCNB Corporation on August 28, 2024 and sell it today you would earn a total of 397.00 from holding LCNB Corporation or generate 29.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affinity Bancshares vs. LCNB Corp.
Performance |
| Timeline |
| Affinity Bancshares |
| LCNB |
Affinity Bancshares and LCNB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity Bancshares and LCNB
The main advantage of trading using opposite Affinity Bancshares and LCNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares position performs unexpectedly, LCNB 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 LCNB will offset losses from the drop in LCNB's long position.| Affinity Bancshares vs. Fifth Third Bancorp | Affinity Bancshares vs. Huntington Bancshares Incorporated | Affinity Bancshares vs. MT Bank |
| LCNB vs. Affinity Bancshares | LCNB vs. Main Street Financial | LCNB vs. Mainstreet Bank | LCNB vs. Oak Valley Bancorp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |