Correlation Between CrossFirst Bankshares and HomeTrust Bancshares
Can any of the company-specific risk be diversified away by investing in both CrossFirst Bankshares and HomeTrust Bancshares 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 CrossFirst Bankshares and HomeTrust Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CrossFirst Bankshares and HomeTrust Bancshares, you can compare the effects of market volatilities on CrossFirst Bankshares and HomeTrust Bancshares 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 CrossFirst Bankshares with a short position of HomeTrust Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of CrossFirst Bankshares and HomeTrust Bancshares.
Diversification Opportunities for CrossFirst Bankshares and HomeTrust Bancshares
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CrossFirst and HomeTrust is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CrossFirst Bankshares and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares and CrossFirst Bankshares 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 CrossFirst Bankshares are associated (or correlated) with HomeTrust Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeTrust Bancshares has no effect on the direction of CrossFirst Bankshares i.e., CrossFirst Bankshares and HomeTrust Bancshares go up and down completely randomly.
Pair Corralation between CrossFirst Bankshares and HomeTrust Bancshares
Considering the 90-day investment horizon CrossFirst Bankshares is expected to generate 1.58 times more return on investment than HomeTrust Bancshares. However, CrossFirst Bankshares is 1.58 times more volatile than HomeTrust Bancshares. It trades about 0.03 of its potential returns per unit of risk. HomeTrust Bancshares is currently generating about -0.12 per unit of risk. If you would invest 1,559 in CrossFirst Bankshares on November 29, 2024 and sell it today you would earn a total of 16.00 from holding CrossFirst Bankshares or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
CrossFirst Bankshares vs. HomeTrust Bancshares
Performance |
| Timeline |
| CrossFirst Bankshares |
| HomeTrust Bancshares |
CrossFirst Bankshares and HomeTrust Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CrossFirst Bankshares and HomeTrust Bancshares
The main advantage of trading using opposite CrossFirst Bankshares and HomeTrust Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CrossFirst Bankshares position performs unexpectedly, HomeTrust Bancshares 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 HomeTrust Bancshares will offset losses from the drop in HomeTrust Bancshares' long position.| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
| HomeTrust Bancshares vs. First Northwest Bancorp | HomeTrust Bancshares vs. Community West Bancshares | HomeTrust Bancshares vs. First Financial Northwest | HomeTrust Bancshares vs. Great Southern 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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