Correlation Between Lakeland Financial and Macatawa Bank
Can any of the company-specific risk be diversified away by investing in both Lakeland Financial and Macatawa Bank 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 Macatawa Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lakeland Financial and Macatawa Bank, you can compare the effects of market volatilities on Lakeland Financial and Macatawa Bank 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 Macatawa Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lakeland Financial and Macatawa Bank.
Diversification Opportunities for Lakeland Financial and Macatawa Bank
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lakeland and Macatawa is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Lakeland Financial and Macatawa Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macatawa Bank 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 Macatawa Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macatawa Bank has no effect on the direction of Lakeland Financial i.e., Lakeland Financial and Macatawa Bank go up and down completely randomly.
Pair Corralation between Lakeland Financial and Macatawa Bank
If you would invest 6,492 in Lakeland Financial on August 24, 2024 and sell it today you would earn a total of 869.00 from holding Lakeland Financial or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Lakeland Financial vs. Macatawa Bank
Performance |
| Timeline |
| Lakeland Financial |
| Macatawa Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lakeland Financial and Macatawa Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lakeland Financial and Macatawa Bank
The main advantage of trading using opposite Lakeland Financial and Macatawa Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lakeland Financial position performs unexpectedly, Macatawa Bank 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 Macatawa Bank will offset losses from the drop in Macatawa Bank's long position.| Lakeland Financial vs. Home Bancorp | Lakeland Financial vs. Heritage Financial | Lakeland Financial vs. First Northwest Bancorp | Lakeland Financial vs. HomeTrust Bancshares |
| Macatawa Bank vs. Home Federal Bancorp | Macatawa Bank vs. First Capital | Macatawa Bank vs. Magyar Bancorp | Macatawa Bank 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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