Correlation Between Farmers Bancorp and Lakeland Financial
Can any of the company-specific risk be diversified away by investing in both Farmers Bancorp and Lakeland Financial 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 Farmers Bancorp and Lakeland Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers Bancorp and Lakeland Financial, you can compare the effects of market volatilities on Farmers Bancorp and Lakeland Financial 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 Farmers Bancorp with a short position of Lakeland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Bancorp and Lakeland Financial.
Diversification Opportunities for Farmers Bancorp and Lakeland Financial
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Farmers and Lakeland is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Bancorp and Lakeland Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Financial and Farmers 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 Farmers Bancorp are associated (or correlated) with Lakeland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Financial has no effect on the direction of Farmers Bancorp i.e., Farmers Bancorp and Lakeland Financial go up and down completely randomly.
Pair Corralation between Farmers Bancorp and Lakeland Financial
Given the investment horizon of 90 days Farmers Bancorp is expected to under-perform the Lakeland Financial. In addition to that, Farmers Bancorp is 1.08 times more volatile than Lakeland Financial. It trades about -0.02 of its total potential returns per unit of risk. Lakeland Financial is currently generating about 0.02 per unit of volatility. If you would invest 6,562 in Lakeland Financial on November 2, 2024 and sell it today you would earn a total of 328.00 from holding Lakeland Financial or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 72.87% |
| Values | Daily Returns |
Farmers Bancorp vs. Lakeland Financial
Performance |
| Timeline |
| Farmers Bancorp |
| Lakeland Financial |
Farmers Bancorp and Lakeland Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Bancorp and Lakeland Financial
The main advantage of trading using opposite Farmers Bancorp and Lakeland Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Bancorp position performs unexpectedly, Lakeland Financial 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 Lakeland Financial will offset losses from the drop in Lakeland Financial's long position.| Farmers Bancorp vs. First Farmers Financial | Farmers Bancorp vs. Farmers Merchants Bancorp | Farmers Bancorp vs. Lakeland Financial | Farmers Bancorp vs. Eagle Financial Services |
| Lakeland Financial vs. KeyCorp | Lakeland Financial vs. Zions Bancorporation | Lakeland Financial vs. Huntington Bancshares Incorporated | Lakeland Financial vs. Comerica |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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