Correlation Between First Busey and HMN Financial
Can any of the company-specific risk be diversified away by investing in both First Busey 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 First Busey and HMN Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Busey Corp and HMN Financial, you can compare the effects of market volatilities on First Busey 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 First Busey with a short position of HMN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Busey and HMN Financial.
Diversification Opportunities for First Busey and HMN Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and HMN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Busey Corp and HMN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMN Financial and First Busey 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 First Busey Corp 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 First Busey i.e., First Busey and HMN Financial go up and down completely randomly.
Pair Corralation between First Busey and HMN Financial
If you would invest 2,345 in First Busey Corp on November 29, 2024 and sell it today you would earn a total of 52.00 from holding First Busey Corp or generate 2.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
First Busey Corp vs. HMN Financial
Performance |
Timeline |
First Busey Corp |
HMN Financial |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
First Busey and HMN Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Busey and HMN Financial
The main advantage of trading using opposite First Busey and HMN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Busey 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.First Busey vs. Home Federal Bancorp | ||
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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