Correlation Between LCNB and Affinity Bancshares
Can any of the company-specific risk be diversified away by investing in both LCNB and Affinity Bancshares 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 LCNB and Affinity Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LCNB Corporation and Affinity Bancshares, you can compare the effects of market volatilities on LCNB and Affinity Bancshares 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 LCNB with a short position of Affinity Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of LCNB and Affinity Bancshares.
Diversification Opportunities for LCNB and Affinity Bancshares
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between LCNB and Affinity is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding LCNB Corp. and Affinity Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affinity Bancshares and LCNB 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 LCNB Corporation are associated (or correlated) with Affinity Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affinity Bancshares has no effect on the direction of LCNB i.e., LCNB and Affinity Bancshares go up and down completely randomly.
Pair Corralation between LCNB and Affinity Bancshares
Given the investment horizon of 90 days LCNB is expected to generate 2.62 times less return on investment than Affinity Bancshares. In addition to that, LCNB is 1.05 times more volatile than Affinity Bancshares. It trades about 0.02 of its total potential returns per unit of risk. Affinity Bancshares is currently generating about 0.05 per unit of volatility. If you would invest 1,485 in Affinity Bancshares on August 28, 2024 and sell it today you would earn a total of 660.00 from holding Affinity Bancshares or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.37% |
| Values | Daily Returns |
LCNB Corp. vs. Affinity Bancshares
Performance |
| Timeline |
| LCNB |
| Affinity Bancshares |
LCNB and Affinity Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LCNB and Affinity Bancshares
The main advantage of trading using opposite LCNB and Affinity Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LCNB position performs unexpectedly, Affinity Bancshares 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 Affinity Bancshares will offset losses from the drop in Affinity Bancshares' long position.| LCNB vs. Affinity Bancshares | LCNB vs. Main Street Financial | LCNB vs. Mainstreet Bank | LCNB vs. Oak Valley Bancorp |
| Affinity Bancshares vs. Fifth Third Bancorp | Affinity Bancshares vs. Huntington Bancshares Incorporated | Affinity Bancshares vs. MT Bank |
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 CEOs Directory module to screen CEOs from public companies around the world.
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