Correlation Between Greenville Federal and Lewis Clark

Can any of the company-specific risk be diversified away by investing in both Greenville Federal and Lewis Clark 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 Greenville Federal and Lewis Clark into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greenville Federal Financial and Lewis Clark Bancorp, you can compare the effects of market volatilities on Greenville Federal and Lewis Clark 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 Greenville Federal with a short position of Lewis Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenville Federal and Lewis Clark.

Diversification Opportunities for Greenville Federal and Lewis Clark

0.58

Correlation Coefficient

Greenville Federal  Lewis Clark

Very weak diversification

The 3 months correlation between Greenville and Lewis is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Greenville Federal Financial and Lewis Clark Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lewis Clark Bancorp and Greenville Federal 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 Greenville Federal Financial are associated (or correlated) with Lewis Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lewis Clark Bancorp has no effect on the direction of Greenville Federal i.e., Greenville Federal and Lewis Clark go up and down completely randomly.

Pair Corralation between Greenville Federal and Lewis Clark

Given the investment horizon of 90 days Greenville Federal is expected to generate 2.01 times less return on investment than Lewis Clark. In addition to that, Greenville Federal is 1.37 times more volatile than Lewis Clark Bancorp. It trades about 0.07 of its total potential returns per unit of risk. Lewis Clark Bancorp is currently generating about 0.19 per unit of volatility. If you would invest  2,175  in Lewis Clark Bancorp on August 12, 2024 and sell it today you would earn a total of  825.00  from holding Lewis Clark Bancorp or generate 37.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Greenville Federal Financial  vs.  Lewis Clark Bancorp

Greenville Federal

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Greenville Federal Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Greenville Federal is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Lewis Clark Bancorp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lewis Clark Bancorp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental indicators, Lewis Clark disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greenville Federal and Lewis Clark

The main advantage of trading using opposite Greenville Federal and Lewis Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenville Federal position performs unexpectedly, Lewis Clark 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 Lewis Clark will offset losses from the drop in Lewis Clark's long position.

The idea behind Greenville Federal Financial and Lewis Clark Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.