Correlation Between Lakeland Financial and First Bancorp
Can any of the company-specific risk be diversified away by investing in both Lakeland Financial and First Bancorp 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 First Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeland Financial and First Bancorp, you can compare the effects of market volatilities on Lakeland Financial and First Bancorp 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 First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeland Financial and First Bancorp.
Diversification Opportunities for Lakeland Financial and First Bancorp
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lakeland and First is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Financial and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp 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 First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of Lakeland Financial i.e., Lakeland Financial and First Bancorp go up and down completely randomly.
Pair Corralation between Lakeland Financial and First Bancorp
Given the investment horizon of 90 days Lakeland Financial is expected to generate 0.88 times more return on investment than First Bancorp. However, Lakeland Financial is 1.13 times less risky than First Bancorp. It trades about 0.01 of its potential returns per unit of risk. First Bancorp is currently generating about 0.0 per unit of risk. If you would invest 6,753 in Lakeland Financial on November 2, 2024 and sell it today you would earn a total of 64.00 from holding Lakeland Financial or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lakeland Financial vs. First Bancorp
Performance |
| Timeline |
| Lakeland Financial |
| First Bancorp |
Lakeland Financial and First Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakeland Financial and First Bancorp
The main advantage of trading using opposite Lakeland Financial and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Financial position performs unexpectedly, First Bancorp 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 Bancorp will offset losses from the drop in First Bancorp's long position.| Lakeland Financial vs. Home Bancorp | Lakeland Financial vs. Heritage Financial | Lakeland Financial vs. First Northwest Bancorp | Lakeland Financial vs. HomeTrust Bancshares |
| First Bancorp vs. LINKBANCORP | First Bancorp vs. Bankwell Financial Group | First Bancorp vs. FS Bancorp | First Bancorp vs. Finward Bancorp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |