Correlation Between LINKBANCORP and Lakeland Bancorp

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

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

Diversification Opportunities for LINKBANCORP and Lakeland Bancorp

-0.13

Correlation Coefficient

LINKBANCORP  Lakeland Bancorp

Good diversification

The 3 months correlation between LINKBANCORP and Lakeland is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and Lakeland Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeland Bancorp and LINKBANCORP 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 LINKBANCORP 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 LINKBANCORP i.e., LINKBANCORP and Lakeland Bancorp go up and down completely randomly.

Pair Corralation between LINKBANCORP and Lakeland Bancorp

Given the investment horizon of 90 days LINKBANCORP is expected to under-perform the Lakeland Bancorp. In addition to that, LINKBANCORP is 1.22 times more volatile than Lakeland Bancorp. It trades about -0.02 of its total potential returns per unit of risk. Lakeland Bancorp is currently generating about 0.01 per unit of volatility. If you would invest  1,431  in Lakeland Bancorp on February 20, 2024 and sell it today you would lose (88.00) from holding Lakeland Bancorp or give up 6.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

LINKBANCORP  vs.  Lakeland Bancorp

LINKBANCORP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LINKBANCORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, LINKBANCORP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Lakeland Bancorp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lakeland Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Lakeland Bancorp may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with LINKBANCORP and Lakeland Bancorp

The main advantage of trading using opposite LINKBANCORP and Lakeland Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LINKBANCORP 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.

The idea behind LINKBANCORP and Lakeland 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.