Correlation Between Lake Shore and Ottawa Savings
Can any of the company-specific risk be diversified away by investing in both Lake Shore and Ottawa Savings 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 Ottawa Savings 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 Ottawa Savings Bancorp, you can compare the effects of market volatilities on Lake Shore and Ottawa Savings 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 Ottawa Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Shore and Ottawa Savings.
Diversification Opportunities for Lake Shore and Ottawa Savings
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lake and Ottawa is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lake Shore Bancorp and Ottawa Savings Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ottawa Savings 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 Ottawa Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ottawa Savings Bancorp has no effect on the direction of Lake Shore i.e., Lake Shore and Ottawa Savings go up and down completely randomly.
Pair Corralation between Lake Shore and Ottawa Savings
If you would invest 1,320 in Lake Shore Bancorp on August 30, 2024 and sell it today you would earn a total of 26.00 from holding Lake Shore Bancorp or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lake Shore Bancorp vs. Ottawa Savings Bancorp
Performance |
| Timeline |
| Lake Shore Bancorp |
| Ottawa Savings Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lake Shore and Ottawa Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Shore and Ottawa Savings
The main advantage of trading using opposite Lake Shore and Ottawa Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Shore position performs unexpectedly, Ottawa Savings 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 Ottawa Savings will offset losses from the drop in Ottawa Savings' long position.| Lake Shore vs. Home Federal Bancorp | Lake Shore vs. Magyar Bancorp | Lake Shore vs. Community West Bancshares |
| Ottawa Savings vs. Lake Shore Bancorp | Ottawa Savings vs. IF Bancorp | Ottawa Savings vs. Home Federal 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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