Correlation Between Northrim BanCorp and Lakeland Bancorp
Can any of the company-specific risk be diversified away by investing in both Northrim BanCorp and Lakeland 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 Northrim BanCorp and Lakeland Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northrim BanCorp and Lakeland Bancorp, you can compare the effects of market volatilities on Northrim BanCorp and Lakeland 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 Northrim BanCorp with a short position of Lakeland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northrim BanCorp and Lakeland Bancorp.
Diversification Opportunities for Northrim BanCorp and Lakeland Bancorp
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Northrim and Lakeland is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Northrim BanCorp and Lakeland Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Bancorp and Northrim BanCorp 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 Northrim BanCorp are associated (or correlated) with Lakeland Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeland Bancorp has no effect on the direction of Northrim BanCorp i.e., Northrim BanCorp and Lakeland Bancorp go up and down completely randomly.
Pair Corralation between Northrim BanCorp and Lakeland Bancorp
If you would invest 4,586 in Northrim BanCorp on August 24, 2024 and sell it today you would earn a total of 3,922 from holding Northrim BanCorp or generate 85.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Northrim BanCorp vs. Lakeland Bancorp
Performance |
| Timeline |
| Northrim BanCorp |
| Lakeland Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northrim BanCorp and Lakeland Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northrim BanCorp and Lakeland Bancorp
The main advantage of trading using opposite Northrim BanCorp and Lakeland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northrim BanCorp position performs unexpectedly, Lakeland 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 Lakeland Bancorp will offset losses from the drop in Lakeland Bancorp's long position.| Northrim BanCorp vs. Peoples Bancorp | Northrim BanCorp vs. Eagle Bancorp | Northrim BanCorp vs. United Bankshares | Northrim BanCorp vs. Pacific Premier Bancorp |
| Lakeland Bancorp vs. Peoples Bancorp | Lakeland Bancorp vs. Primis Financial Corp | Lakeland Bancorp vs. ConnectOne Bancorp | Lakeland Bancorp vs. LINKBANCORP |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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