Correlation Between LCNB and Wayne Savings
Can any of the company-specific risk be diversified away by investing in both LCNB and Wayne Savings 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 Wayne Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LCNB Corporation and Wayne Savings Bancshares, you can compare the effects of market volatilities on LCNB and Wayne Savings 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 Wayne Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LCNB and Wayne Savings.
Diversification Opportunities for LCNB and Wayne Savings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LCNB and Wayne is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding LCNB Corp. and Wayne Savings Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayne Savings 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 Wayne Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayne Savings Bancshares has no effect on the direction of LCNB i.e., LCNB and Wayne Savings go up and down completely randomly.
Pair Corralation between LCNB and Wayne Savings
Given the investment horizon of 90 days LCNB is expected to generate 8.33 times less return on investment than Wayne Savings. In addition to that, LCNB is 1.2 times more volatile than Wayne Savings Bancshares. It trades about 0.02 of its total potential returns per unit of risk. Wayne Savings Bancshares is currently generating about 0.17 per unit of volatility. If you would invest 2,645 in Wayne Savings Bancshares on August 28, 2024 and sell it today you would earn a total of 196.00 from holding Wayne Savings Bancshares or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.04% |
| Values | Daily Returns |
LCNB Corp. vs. Wayne Savings Bancshares
Performance |
| Timeline |
| LCNB |
| Wayne Savings Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LCNB and Wayne Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LCNB and Wayne Savings
The main advantage of trading using opposite LCNB and Wayne Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LCNB position performs unexpectedly, Wayne Savings 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 Wayne Savings will offset losses from the drop in Wayne Savings' long position.| LCNB vs. Affinity Bancshares | LCNB vs. Main Street Financial | LCNB vs. Mainstreet Bank | LCNB vs. Oak Valley Bancorp |
| Wayne Savings vs. First IC | Wayne Savings vs. CCFNB Bancorp | Wayne Savings vs. Glen Burnie Bancorp | Wayne Savings vs. Main Street Financial |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |