Correlation Between Lake Shore and Magyar Bancorp
Can any of the company-specific risk be diversified away by investing in both Lake Shore and Magyar 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 Lake Shore and Magyar Bancorp 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 Magyar Bancorp, you can compare the effects of market volatilities on Lake Shore and Magyar 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 Lake Shore with a short position of Magyar Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Shore and Magyar Bancorp.
Diversification Opportunities for Lake Shore and Magyar Bancorp
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lake and Magyar is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lake Shore Bancorp and Magyar Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magyar 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 Magyar Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magyar Bancorp has no effect on the direction of Lake Shore i.e., Lake Shore and Magyar Bancorp go up and down completely randomly.
Pair Corralation between Lake Shore and Magyar Bancorp
Given the investment horizon of 90 days Lake Shore Bancorp is expected to generate 3.13 times more return on investment than Magyar Bancorp. However, Lake Shore is 3.13 times more volatile than Magyar Bancorp. It trades about 0.26 of its potential returns per unit of risk. Magyar Bancorp is currently generating about 0.02 per unit of risk. If you would invest 1,328 in Lake Shore Bancorp on November 2, 2024 and sell it today you would earn a total of 260.00 from holding Lake Shore Bancorp or generate 19.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Lake Shore Bancorp vs. Magyar Bancorp
Performance |
| Timeline |
| Lake Shore Bancorp |
| Magyar Bancorp |
Lake Shore and Magyar Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Shore and Magyar Bancorp
The main advantage of trading using opposite Lake Shore and Magyar Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Shore position performs unexpectedly, Magyar 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 Magyar Bancorp will offset losses from the drop in Magyar Bancorp's long position.| Lake Shore vs. Home Federal Bancorp | Lake Shore vs. Magyar Bancorp | Lake Shore vs. Community West Bancshares |
| Magyar Bancorp vs. Home Federal Bancorp | Magyar Bancorp vs. Community West Bancshares | Magyar Bancorp vs. First Financial Northwest | Magyar Bancorp vs. First Northwest 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |