Correlation Between Lake Shore and Pathfinder Bancorp
Can any of the company-specific risk be diversified away by investing in both Lake Shore and Pathfinder 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 Pathfinder 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 Pathfinder Bancorp, you can compare the effects of market volatilities on Lake Shore and Pathfinder 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 Pathfinder Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Shore and Pathfinder Bancorp.
Diversification Opportunities for Lake Shore and Pathfinder Bancorp
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lake and Pathfinder is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lake Shore Bancorp and Pathfinder Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pathfinder 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 Pathfinder Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pathfinder Bancorp has no effect on the direction of Lake Shore i.e., Lake Shore and Pathfinder Bancorp go up and down completely randomly.
Pair Corralation between Lake Shore and Pathfinder Bancorp
Given the investment horizon of 90 days Lake Shore is expected to generate 1.62 times less return on investment than Pathfinder Bancorp. But when comparing it to its historical volatility, Lake Shore Bancorp is 1.38 times less risky than Pathfinder Bancorp. It trades about 0.05 of its potential returns per unit of risk. Pathfinder Bancorp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,366 in Pathfinder Bancorp on August 28, 2024 and sell it today you would earn a total of 416.00 from holding Pathfinder Bancorp or generate 30.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.07% |
| Values | Daily Returns |
Lake Shore Bancorp vs. Pathfinder Bancorp
Performance |
| Timeline |
| Lake Shore Bancorp |
| Pathfinder Bancorp |
Lake Shore and Pathfinder Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Shore and Pathfinder Bancorp
The main advantage of trading using opposite Lake Shore and Pathfinder Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Shore position performs unexpectedly, Pathfinder 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 Pathfinder Bancorp will offset losses from the drop in Pathfinder Bancorp's long position.| Lake Shore vs. Home Federal Bancorp | Lake Shore vs. Magyar Bancorp | Lake Shore vs. Community West Bancshares |
| Pathfinder Bancorp vs. Home Federal Bancorp | Pathfinder Bancorp vs. Lake Shore Bancorp | Pathfinder Bancorp vs. Magyar Bancorp | Pathfinder Bancorp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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