Correlation Between Central Pacific and Lewis Clark
Can any of the company-specific risk be diversified away by investing in both Central Pacific 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 Central Pacific and Lewis Clark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Pacific Financial and Lewis Clark Bancorp, you can compare the effects of market volatilities on Central Pacific 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 Central Pacific with a short position of Lewis Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Pacific and Lewis Clark.
Diversification Opportunities for Central Pacific and Lewis Clark
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Central and Lewis is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Central Pacific 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 Central Pacific 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 Central Pacific 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 Central Pacific i.e., Central Pacific and Lewis Clark go up and down completely randomly.
Pair Corralation between Central Pacific and Lewis Clark
Considering the 90-day investment horizon Central Pacific Financial is expected to generate 1.11 times more return on investment than Lewis Clark. However, Central Pacific is 1.11 times more volatile than Lewis Clark Bancorp. It trades about 0.1 of its potential returns per unit of risk. Lewis Clark Bancorp is currently generating about 0.05 per unit of risk. If you would invest 1,667 in Central Pacific Financial on September 12, 2024 and sell it today you would earn a total of 1,436 from holding Central Pacific Financial or generate 86.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 67.33% |
| Values | Daily Returns |
Central Pacific Financial vs. Lewis Clark Bancorp
Performance |
| Timeline |
| Central Pacific Financial |
| Lewis Clark Bancorp |
Central Pacific and Lewis Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Pacific and Lewis Clark
The main advantage of trading using opposite Central Pacific and Lewis Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Pacific 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.| Central Pacific vs. Bank of Hawaii | Central Pacific vs. Territorial Bancorp | Central Pacific vs. First Bancorp | Central Pacific vs. Hancock Whitney Corp |
| Lewis Clark vs. FitLife Brands, Common | Lewis Clark vs. Perseus Mining Limited | Lewis Clark vs. Mesa Air Group | Lewis Clark vs. Sligro Food Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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