Correlation Between LINKBANCORP and Lake Shore
Can any of the company-specific risk be diversified away by investing in both LINKBANCORP and Lake Shore 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 LINKBANCORP and Lake Shore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LINKBANCORP and Lake Shore Bancorp, you can compare the effects of market volatilities on LINKBANCORP and Lake Shore 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 LINKBANCORP with a short position of Lake Shore. Check out your portfolio center. Please also check ongoing floating volatility patterns of LINKBANCORP and Lake Shore.
Diversification Opportunities for LINKBANCORP and Lake Shore
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LINKBANCORP and Lake is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and Lake Shore Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Shore Bancorp and LINKBANCORP 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 LINKBANCORP are associated (or correlated) with Lake Shore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Shore Bancorp has no effect on the direction of LINKBANCORP i.e., LINKBANCORP and Lake Shore go up and down completely randomly.
Pair Corralation between LINKBANCORP and Lake Shore
Given the investment horizon of 90 days LINKBANCORP is expected to under-perform the Lake Shore. But the stock apears to be less risky and, when comparing its historical volatility, LINKBANCORP is 2.6 times less risky than Lake Shore. The stock trades about -0.16 of its potential returns per unit of risk. The Lake Shore Bancorp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,328 in Lake Shore Bancorp on November 3, 2024 and sell it today you would earn a total of 236.00 from holding Lake Shore Bancorp or generate 17.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
LINKBANCORP vs. Lake Shore Bancorp
Performance |
| Timeline |
| LINKBANCORP |
| Lake Shore Bancorp |
LINKBANCORP and Lake Shore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LINKBANCORP and Lake Shore
The main advantage of trading using opposite LINKBANCORP and Lake Shore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LINKBANCORP position performs unexpectedly, Lake Shore 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 Lake Shore will offset losses from the drop in Lake Shore's long position.| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP vs. Magyar Bancorp |
| Lake Shore vs. Home Federal Bancorp | Lake Shore vs. Magyar Bancorp | Lake Shore 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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