Correlation Between Lakeland Financial and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Lakeland Financial and Eagle 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 Financial and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeland Financial and Eagle Financial Services, you can compare the effects of market volatilities on Lakeland Financial and Eagle 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 Financial with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeland Financial and Eagle Financial.
Diversification Opportunities for Lakeland Financial and Eagle Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lakeland and Eagle is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Financial and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services and Lakeland Financial 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 Financial are associated (or correlated) with Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of Lakeland Financial i.e., Lakeland Financial and Eagle Financial go up and down completely randomly.
Pair Corralation between Lakeland Financial and Eagle Financial
Given the investment horizon of 90 days Lakeland Financial is expected to generate 1.05 times more return on investment than Eagle Financial. However, Lakeland Financial is 1.05 times more volatile than Eagle Financial Services. It trades about 0.05 of its potential returns per unit of risk. Eagle Financial Services is currently generating about 0.03 per unit of risk. If you would invest 5,186 in Lakeland Financial on September 2, 2024 and sell it today you would earn a total of 2,160 from holding Lakeland Financial or generate 41.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 75.54% |
| Values | Daily Returns |
Lakeland Financial vs. Eagle Financial Services
Performance |
| Timeline |
| Lakeland Financial |
| Eagle Financial Services |
Lakeland Financial and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakeland Financial and Eagle Financial
The main advantage of trading using opposite Lakeland Financial and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Financial position performs unexpectedly, Eagle 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 Eagle Financial will offset losses from the drop in Eagle Financial's long position.| Lakeland Financial vs. Home Bancorp | Lakeland Financial vs. Heritage Financial | Lakeland Financial vs. First Northwest Bancorp | Lakeland Financial vs. HomeTrust Bancshares |
| Eagle Financial vs. HUMANA INC | Eagle Financial vs. SCOR PK | Eagle Financial vs. Aquagold International | Eagle Financial vs. Thrivent High Yield |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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