Correlation Between Coeur DAlene and Home Federal
Can any of the company-specific risk be diversified away by investing in both Coeur DAlene and Home Federal 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 Coeur DAlene and Home Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coeur dAlene Bancorp and Home Federal Bancorp, you can compare the effects of market volatilities on Coeur DAlene and Home Federal 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 Coeur DAlene with a short position of Home Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur DAlene and Home Federal.
Diversification Opportunities for Coeur DAlene and Home Federal
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coeur and Home is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Coeur dAlene Bancorp and Home Federal Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Federal Bancorp and Coeur DAlene 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 Coeur dAlene Bancorp are associated (or correlated) with Home Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Federal Bancorp has no effect on the direction of Coeur DAlene i.e., Coeur DAlene and Home Federal go up and down completely randomly.
Pair Corralation between Coeur DAlene and Home Federal
Given the investment horizon of 90 days Coeur dAlene Bancorp is expected to generate 0.81 times more return on investment than Home Federal. However, Coeur dAlene Bancorp is 1.23 times less risky than Home Federal. It trades about 0.41 of its potential returns per unit of risk. Home Federal Bancorp is currently generating about -0.03 per unit of risk. If you would invest 1,410 in Coeur dAlene Bancorp on August 29, 2024 and sell it today you would earn a total of 265.00 from holding Coeur dAlene Bancorp or generate 18.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Coeur dAlene Bancorp vs. Home Federal Bancorp
Performance |
| Timeline |
| Coeur dAlene Bancorp |
| Home Federal Bancorp |
Coeur DAlene and Home Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coeur DAlene and Home Federal
The main advantage of trading using opposite Coeur DAlene and Home Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coeur DAlene position performs unexpectedly, Home Federal 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 Home Federal will offset losses from the drop in Home Federal's long position.| Coeur DAlene vs. Israel Discount Bank | Coeur DAlene vs. Baraboo Bancorporation | Coeur DAlene vs. Danske Bank AS | Coeur DAlene vs. Jyske Bank AS |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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