Correlation Between Community Heritage and Lewis Clark
Can any of the company-specific risk be diversified away by investing in both Community Heritage and Lewis Clark 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 Community Heritage and Lewis Clark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community Heritage Financial and Lewis Clark Bancorp, you can compare the effects of market volatilities on Community Heritage and Lewis Clark 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 Community Heritage with a short position of Lewis Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community Heritage and Lewis Clark.
Diversification Opportunities for Community Heritage and Lewis Clark
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Community and Lewis is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Community Heritage Financial and Lewis Clark Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lewis Clark Bancorp and Community Heritage 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 Community Heritage Financial are associated (or correlated) with Lewis Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lewis Clark Bancorp has no effect on the direction of Community Heritage i.e., Community Heritage and Lewis Clark go up and down completely randomly.
Pair Corralation between Community Heritage and Lewis Clark
Given the investment horizon of 90 days Community Heritage Financial is expected to generate 0.83 times more return on investment than Lewis Clark. However, Community Heritage Financial is 1.21 times less risky than Lewis Clark. It trades about 0.03 of its potential returns per unit of risk. Lewis Clark Bancorp is currently generating about 0.0 per unit of risk. If you would invest 1,956 in Community Heritage Financial on August 24, 2024 and sell it today you would earn a total of 243.00 from holding Community Heritage Financial or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.05% |
| Values | Daily Returns |
Community Heritage Financial vs. Lewis Clark Bancorp
Performance |
| Timeline |
| Community Heritage |
| Lewis Clark Bancorp |
Community Heritage and Lewis Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Community Heritage and Lewis Clark
The main advantage of trading using opposite Community Heritage and Lewis Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community Heritage position performs unexpectedly, Lewis Clark 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 Lewis Clark will offset losses from the drop in Lewis Clark's long position.| Community Heritage vs. Nedbank Group | Community Heritage vs. Standard Bank Group | Community Heritage vs. Bank Central Asia | Community Heritage vs. PSB Holdings |
| Lewis Clark vs. Nedbank Group | Lewis Clark vs. Standard Bank Group | Lewis Clark vs. Bank Central Asia | Lewis Clark vs. PSB Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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