Correlation Between Liberty Northwest and Santa Cruz
Can any of the company-specific risk be diversified away by investing in both Liberty Northwest and Santa Cruz 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 Liberty Northwest and Santa Cruz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Northwest Bancorp and Santa Cruz County, you can compare the effects of market volatilities on Liberty Northwest and Santa Cruz 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 Liberty Northwest with a short position of Santa Cruz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Northwest and Santa Cruz.
Diversification Opportunities for Liberty Northwest and Santa Cruz
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Liberty and Santa is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Northwest Bancorp and Santa Cruz County in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santa Cruz County and Liberty Northwest 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 Liberty Northwest Bancorp are associated (or correlated) with Santa Cruz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santa Cruz County has no effect on the direction of Liberty Northwest i.e., Liberty Northwest and Santa Cruz go up and down completely randomly.
Pair Corralation between Liberty Northwest and Santa Cruz
Given the investment horizon of 90 days Liberty Northwest Bancorp is expected to under-perform the Santa Cruz. But the otc stock apears to be less risky and, when comparing its historical volatility, Liberty Northwest Bancorp is 1.57 times less risky than Santa Cruz. The otc stock trades about -0.03 of its potential returns per unit of risk. The Santa Cruz County is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,396 in Santa Cruz County on September 1, 2024 and sell it today you would earn a total of 1,759 from holding Santa Cruz County or generate 73.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.55% |
| Values | Daily Returns |
Liberty Northwest Bancorp vs. Santa Cruz County
Performance |
| Timeline |
| Liberty Northwest Bancorp |
| Santa Cruz County |
Liberty Northwest and Santa Cruz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Northwest and Santa Cruz
The main advantage of trading using opposite Liberty Northwest and Santa Cruz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Northwest position performs unexpectedly, Santa Cruz 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 Santa Cruz will offset losses from the drop in Santa Cruz's long position.| Liberty Northwest vs. Chester Mining | Liberty Northwest vs. GAMCO Global Gold | Liberty Northwest vs. Getty Copper | Liberty Northwest vs. Black Hills |
| Santa Cruz vs. Harbor Bankshares | Santa Cruz vs. Liberty Northwest Bancorp | Santa Cruz vs. Pioneer Bankcorp | Santa Cruz vs. Summit 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |