Correlation Between Partners Bancorp and Lake Shore
Can any of the company-specific risk be diversified away by investing in both Partners Bancorp and Lake Shore 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 Partners Bancorp and Lake Shore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Partners Bancorp and Lake Shore Bancorp, you can compare the effects of market volatilities on Partners Bancorp and Lake Shore 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 Partners Bancorp with a short position of Lake Shore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partners Bancorp and Lake Shore.
Diversification Opportunities for Partners Bancorp and Lake Shore
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Partners and Lake is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Partners Bancorp and Lake Shore Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Shore Bancorp and Partners 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 Partners Bancorp are associated (or correlated) with Lake Shore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Shore Bancorp has no effect on the direction of Partners Bancorp i.e., Partners Bancorp and Lake Shore go up and down completely randomly.
Pair Corralation between Partners Bancorp and Lake Shore
Given the investment horizon of 90 days Partners Bancorp is expected to under-perform the Lake Shore. In addition to that, Partners Bancorp is 1.26 times more volatile than Lake Shore Bancorp. It trades about -0.05 of its total potential returns per unit of risk. Lake Shore Bancorp is currently generating about 0.02 per unit of volatility. If you would invest 1,228 in Lake Shore Bancorp on August 28, 2024 and sell it today you would earn a total of 118.00 from holding Lake Shore Bancorp or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 29.78% |
| Values | Daily Returns |
Partners Bancorp vs. Lake Shore Bancorp
Performance |
| Timeline |
| Partners Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lake Shore Bancorp |
Partners Bancorp and Lake Shore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Partners Bancorp and Lake Shore
The main advantage of trading using opposite Partners Bancorp and Lake Shore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partners Bancorp position performs unexpectedly, Lake Shore 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 Lake Shore will offset losses from the drop in Lake Shore's long position.| Partners Bancorp vs. Home Federal Bancorp | Partners Bancorp vs. Magyar Bancorp | Partners Bancorp vs. Community West Bancshares | Partners Bancorp vs. Lake Shore Bancorp |
| Lake Shore vs. Home Federal Bancorp | Lake Shore vs. Magyar Bancorp | Lake Shore 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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