Correlation Between Zions Bancorporation and Lake Shore
Can any of the company-specific risk be diversified away by investing in both Zions Bancorporation 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 Zions Bancorporation and Lake Shore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zions Bancorporation and Lake Shore Bancorp, you can compare the effects of market volatilities on Zions Bancorporation 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 Zions Bancorporation with a short position of Lake Shore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zions Bancorporation and Lake Shore.
Diversification Opportunities for Zions Bancorporation and Lake Shore
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zions and Lake is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Zions 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 Zions Bancorporation 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 Zions Bancorporation 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 Zions Bancorporation i.e., Zions Bancorporation and Lake Shore go up and down completely randomly.
Pair Corralation between Zions Bancorporation and Lake Shore
Given the investment horizon of 90 days Zions Bancorporation is expected to generate 1.46 times more return on investment than Lake Shore. However, Zions Bancorporation is 1.46 times more volatile than Lake Shore Bancorp. It trades about 0.14 of its potential returns per unit of risk. Lake Shore Bancorp is currently generating about 0.1 per unit of risk. If you would invest 4,642 in Zions Bancorporation on September 15, 2024 and sell it today you would earn a total of 1,125 from holding Zions Bancorporation or generate 24.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 92.19% |
Values | Daily Returns |
Zions Bancorp. vs. Lake Shore Bancorp
Performance |
Timeline |
Zions Bancorporation |
Lake Shore Bancorp |
Zions Bancorporation and Lake Shore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zions Bancorporation and Lake Shore
The main advantage of trading using opposite Zions Bancorporation and Lake Shore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zions Bancorporation 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.Zions Bancorporation vs. KeyCorp | Zions Bancorporation vs. Comerica | Zions Bancorporation vs. First Horizon National | Zions Bancorporation vs. Western Alliance Bancorporation |
Lake Shore vs. Comerica | Lake Shore vs. Fifth Third Bancorp | Lake Shore vs. Zions Bancorporation | Lake Shore vs. PNC Financial Services |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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