Correlation Between Lake Shore and Blue Foundry
Can any of the company-specific risk be diversified away by investing in both Lake Shore and Blue Foundry 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 Lake Shore and Blue Foundry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lake Shore Bancorp and Blue Foundry Bancorp, you can compare the effects of market volatilities on Lake Shore and Blue Foundry 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 Lake Shore with a short position of Blue Foundry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Shore and Blue Foundry.
Diversification Opportunities for Lake Shore and Blue Foundry
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lake and Blue is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lake Shore Bancorp and Blue Foundry Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Foundry Bancorp and Lake Shore 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 Lake Shore Bancorp are associated (or correlated) with Blue Foundry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Foundry Bancorp has no effect on the direction of Lake Shore i.e., Lake Shore and Blue Foundry go up and down completely randomly.
Pair Corralation between Lake Shore and Blue Foundry
Given the investment horizon of 90 days Lake Shore Bancorp is expected to under-perform the Blue Foundry. In addition to that, Lake Shore is 1.3 times more volatile than Blue Foundry Bancorp. It trades about -0.3 of its total potential returns per unit of risk. Blue Foundry Bancorp is currently generating about -0.17 per unit of volatility. If you would invest 929.00 in Blue Foundry Bancorp on January 8, 2025 and sell it today you would lose (48.50) from holding Blue Foundry Bancorp or give up 5.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lake Shore Bancorp vs. Blue Foundry Bancorp
Performance |
| Timeline |
| Lake Shore Bancorp |
| Blue Foundry Bancorp |
Lake Shore and Blue Foundry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Shore and Blue Foundry
The main advantage of trading using opposite Lake Shore and Blue Foundry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Shore position performs unexpectedly, Blue Foundry 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 Blue Foundry will offset losses from the drop in Blue Foundry's long position.| Lake Shore vs. Home Federal Bancorp | Lake Shore vs. Magyar Bancorp | Lake Shore vs. Community West Bancshares |
| Blue Foundry vs. Home Federal Bancorp | Blue Foundry vs. Lake Shore Bancorp | Blue Foundry vs. Community West Bancshares | Blue Foundry vs. Bogota Financial Corp |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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