Correlation Between Lake Shore and Peoples Bancorp
Can any of the company-specific risk be diversified away by investing in both Lake Shore and Peoples 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 Peoples 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 Peoples Bancorp of, you can compare the effects of market volatilities on Lake Shore and Peoples 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 Peoples Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lake Shore and Peoples Bancorp.
Diversification Opportunities for Lake Shore and Peoples Bancorp
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lake and Peoples is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lake Shore Bancorp and Peoples Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples 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 Peoples Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Bancorp has no effect on the direction of Lake Shore i.e., Lake Shore and Peoples Bancorp go up and down completely randomly.
Pair Corralation between Lake Shore and Peoples Bancorp
Given the investment horizon of 90 days Lake Shore is expected to generate 8.42 times less return on investment than Peoples Bancorp. But when comparing it to its historical volatility, Lake Shore Bancorp is 2.14 times less risky than Peoples Bancorp. It trades about 0.07 of its potential returns per unit of risk. Peoples Bancorp of is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,599 in Peoples Bancorp of on August 30, 2024 and sell it today you would earn a total of 545.00 from holding Peoples Bancorp of or generate 20.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Lake Shore Bancorp vs. Peoples Bancorp of
Performance |
| Timeline |
| Lake Shore Bancorp |
| Peoples Bancorp |
Lake Shore and Peoples Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lake Shore and Peoples Bancorp
The main advantage of trading using opposite Lake Shore and Peoples Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Shore position performs unexpectedly, Peoples 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 Peoples Bancorp will offset losses from the drop in Peoples Bancorp's long position.| Lake Shore vs. Home Federal Bancorp | Lake Shore vs. Magyar Bancorp | Lake Shore vs. Community West Bancshares |
| Peoples Bancorp vs. Home Federal Bancorp | Peoples Bancorp vs. Investar Holding Corp | Peoples Bancorp vs. Lake Shore Bancorp | Peoples Bancorp vs. Finward 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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