Correlation Between Alpine Banks and HMN Financial
Can any of the company-specific risk be diversified away by investing in both Alpine Banks and HMN Financial 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 Alpine Banks and HMN Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpine Banks of and HMN Financial, you can compare the effects of market volatilities on Alpine Banks and HMN Financial 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 Alpine Banks with a short position of HMN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpine Banks and HMN Financial.
Diversification Opportunities for Alpine Banks and HMN Financial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alpine and HMN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alpine Banks of and HMN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMN Financial and Alpine Banks 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 Alpine Banks of are associated (or correlated) with HMN Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMN Financial has no effect on the direction of Alpine Banks i.e., Alpine Banks and HMN Financial go up and down completely randomly.
Pair Corralation between Alpine Banks and HMN Financial
If you would invest 2,974 in Alpine Banks of on September 3, 2024 and sell it today you would earn a total of 326.00 from holding Alpine Banks of or generate 10.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Alpine Banks of vs. HMN Financial
Performance |
| Timeline |
| Alpine Banks |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Alpine Banks and HMN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpine Banks and HMN Financial
The main advantage of trading using opposite Alpine Banks and HMN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpine Banks position performs unexpectedly, HMN Financial 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 HMN Financial will offset losses from the drop in HMN Financial's long position.The idea behind Alpine Banks of and HMN Financial 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.| HMN Financial vs. Magyar Bancorp | HMN Financial vs. Home Federal Bancorp | HMN Financial vs. First Financial Northwest | HMN Financial vs. First Northwest Bancorp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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