Correlation Between ICC Holdings and Lake Shore
Can any of the company-specific risk be diversified away by investing in both ICC Holdings and Lake Shore 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 ICC Holdings and Lake Shore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICC Holdings and Lake Shore Bancorp, you can compare the effects of market volatilities on ICC Holdings and Lake Shore 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 ICC Holdings with a short position of Lake Shore. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and Lake Shore.
Diversification Opportunities for ICC Holdings and Lake Shore
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICC and Lake is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ICC Holdings and Lake Shore Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Shore Bancorp and ICC Holdings 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 ICC Holdings are associated (or correlated) with Lake Shore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Shore Bancorp has no effect on the direction of ICC Holdings i.e., ICC Holdings and Lake Shore go up and down completely randomly.
Pair Corralation between ICC Holdings and Lake Shore
Given the investment horizon of 90 days ICC Holdings is expected to under-perform the Lake Shore. But the stock apears to be less risky and, when comparing its historical volatility, ICC Holdings is 3.09 times less risky than Lake Shore. The stock trades about -0.02 of its potential returns per unit of risk. The Lake Shore Bancorp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,319 in Lake Shore Bancorp on August 31, 2024 and sell it today you would earn a total of 31.00 from holding Lake Shore Bancorp or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
ICC Holdings vs. Lake Shore Bancorp
Performance |
| Timeline |
| ICC Holdings |
| Lake Shore Bancorp |
ICC Holdings and Lake Shore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC Holdings and Lake Shore
The main advantage of trading using opposite ICC Holdings and Lake Shore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC Holdings position performs unexpectedly, Lake Shore 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 Lake Shore will offset losses from the drop in Lake Shore's long position.| ICC Holdings vs. Employers Holdings | ICC Holdings vs. AMERISAFE | ICC Holdings vs. NMI Holdings | ICC Holdings vs. Investors Title |
| Lake Shore vs. KeyCorp | Lake Shore vs. Comerica | Lake Shore vs. First Horizon National | Lake Shore vs. Western Alliance Bancorporation |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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