Correlation Between Independent Bank and Lakeland Bancorp
Can any of the company-specific risk be diversified away by investing in both Independent Bank and Lakeland Bancorp 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 Independent Bank and Lakeland Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Independent Bank and Lakeland Bancorp, you can compare the effects of market volatilities on Independent Bank and Lakeland Bancorp 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 Independent Bank with a short position of Lakeland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independent Bank and Lakeland Bancorp.
Diversification Opportunities for Independent Bank and Lakeland Bancorp
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Independent and Lakeland is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Independent Bank and Lakeland Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Bancorp and Independent Bank 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 Independent Bank are associated (or correlated) with Lakeland Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Bancorp has no effect on the direction of Independent Bank i.e., Independent Bank and Lakeland Bancorp go up and down completely randomly.
Pair Corralation between Independent Bank and Lakeland Bancorp
If you would invest 6,369 in Independent Bank on August 29, 2024 and sell it today you would earn a total of 967.00 from holding Independent Bank or generate 15.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Independent Bank vs. Lakeland Bancorp
Performance |
| Timeline |
| Independent Bank |
| Lakeland Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Independent Bank and Lakeland Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independent Bank and Lakeland Bancorp
The main advantage of trading using opposite Independent Bank and Lakeland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independent Bank position performs unexpectedly, Lakeland Bancorp 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 Bancorp will offset losses from the drop in Lakeland Bancorp's long position.| Independent Bank vs. Capitol Federal Financial | Independent Bank vs. BankFinancial | Independent Bank vs. Business First Bancshares | Independent Bank vs. First Bancorp |
| Lakeland Bancorp vs. Peoples Bancorp | Lakeland Bancorp vs. Primis Financial Corp | Lakeland Bancorp vs. ConnectOne Bancorp | Lakeland Bancorp vs. LINKBANCORP |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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