Correlation Between Lewis Clark and Freedom Bank
Can any of the company-specific risk be diversified away by investing in both Lewis Clark and Freedom Bank 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 Lewis Clark and Freedom Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lewis Clark Bancorp and Freedom Bank of, you can compare the effects of market volatilities on Lewis Clark and Freedom Bank 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 Lewis Clark with a short position of Freedom Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lewis Clark and Freedom Bank.
Diversification Opportunities for Lewis Clark and Freedom Bank
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lewis and Freedom is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lewis Clark Bancorp and Freedom Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Bank and Lewis Clark 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 Lewis Clark Bancorp are associated (or correlated) with Freedom Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Bank has no effect on the direction of Lewis Clark i.e., Lewis Clark and Freedom Bank go up and down completely randomly.
Pair Corralation between Lewis Clark and Freedom Bank
Given the investment horizon of 90 days Lewis Clark Bancorp is expected to generate 0.79 times more return on investment than Freedom Bank. However, Lewis Clark Bancorp is 1.27 times less risky than Freedom Bank. It trades about 0.26 of its potential returns per unit of risk. Freedom Bank of is currently generating about 0.07 per unit of risk. If you would invest 2,600 in Lewis Clark Bancorp on September 12, 2024 and sell it today you would earn a total of 400.00 from holding Lewis Clark Bancorp or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Lewis Clark Bancorp vs. Freedom Bank of
Performance |
| Timeline |
| Lewis Clark Bancorp |
| Freedom Bank |
Lewis Clark and Freedom Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lewis Clark and Freedom Bank
The main advantage of trading using opposite Lewis Clark and Freedom Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lewis Clark position performs unexpectedly, Freedom Bank 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 Freedom Bank will offset losses from the drop in Freedom Bank's long position.| Lewis Clark vs. Getty Images Holdings | Lewis Clark vs. Pinterest | Lewis Clark vs. Cadence Design Systems | Lewis Clark vs. Zhihu Inc ADR |
| Freedom Bank vs. National Capital Bank | Freedom Bank vs. Community Heritage Financial | Freedom Bank vs. Citizens Financial Corp | Freedom Bank vs. Bank of Idaho |
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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