Correlation Between Lakeland Financial and Home Federal
Can any of the company-specific risk be diversified away by investing in both Lakeland Financial and Home Federal 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 Home Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeland Financial and Home Federal Bancorp, you can compare the effects of market volatilities on Lakeland Financial and Home Federal 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 Home Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeland Financial and Home Federal.
Diversification Opportunities for Lakeland Financial and Home Federal
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lakeland and Home is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Financial and Home Federal Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Federal 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 Home Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Federal Bancorp has no effect on the direction of Lakeland Financial i.e., Lakeland Financial and Home Federal go up and down completely randomly.
Pair Corralation between Lakeland Financial and Home Federal
Given the investment horizon of 90 days Lakeland Financial is expected to generate 24.22 times less return on investment than Home Federal. But when comparing it to its historical volatility, Lakeland Financial is 26.14 times less risky than Home Federal. It trades about 0.05 of its potential returns per unit of risk. Home Federal Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,274 in Home Federal Bancorp on September 2, 2024 and sell it today you would lose (38.00) from holding Home Federal Bancorp or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 87.1% |
| Values | Daily Returns |
Lakeland Financial vs. Home Federal Bancorp
Performance |
| Timeline |
| Lakeland Financial |
| Home Federal Bancorp |
Lakeland Financial and Home Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakeland Financial and Home Federal
The main advantage of trading using opposite Lakeland Financial and Home Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Financial position performs unexpectedly, Home Federal 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 Home Federal will offset losses from the drop in Home Federal's long position.| Lakeland Financial vs. Home Bancorp | Lakeland Financial vs. Heritage Financial | Lakeland Financial vs. First Northwest Bancorp | Lakeland Financial vs. HomeTrust Bancshares |
| Home Federal vs. Affinity Bancshares | Home Federal vs. Auburn National Bancorporation | Home Federal vs. BayCom Corp | Home Federal vs. Community West 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |