Correlation Between Lakeland Bancorp and First Financial
Can any of the company-specific risk be diversified away by investing in both Lakeland Bancorp and First 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 Lakeland Bancorp and First Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeland Bancorp and First Financial Northwest, you can compare the effects of market volatilities on Lakeland Bancorp and First 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 Lakeland Bancorp with a short position of First Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeland Bancorp and First Financial.
Diversification Opportunities for Lakeland Bancorp and First Financial
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lakeland and First is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Bancorp and First Financial Northwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Financial Northwest and Lakeland 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 Lakeland Bancorp are associated (or correlated) with First Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Financial Northwest has no effect on the direction of Lakeland Bancorp i.e., Lakeland Bancorp and First Financial go up and down completely randomly.
Pair Corralation between Lakeland Bancorp and First Financial
If you would invest 1,234 in First Financial Northwest on September 2, 2024 and sell it today you would earn a total of 1,026 from holding First Financial Northwest or generate 83.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Lakeland Bancorp vs. First Financial Northwest
Performance |
| Timeline |
| Lakeland Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Financial Northwest |
Lakeland Bancorp and First Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakeland Bancorp and First Financial
The main advantage of trading using opposite Lakeland Bancorp and First Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Bancorp position performs unexpectedly, First 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 First Financial will offset losses from the drop in First Financial's long position.| Lakeland Bancorp vs. Peoples Bancorp | Lakeland Bancorp vs. Primis Financial Corp | Lakeland Bancorp vs. ConnectOne Bancorp | Lakeland Bancorp vs. LINKBANCORP |
| First Financial vs. Home Federal Bancorp | First Financial vs. First Northwest Bancorp | First Financial vs. First Capital | First Financial vs. Community West Bancshares |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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