Correlation Between Primis Financial and Home Bancorp
Can any of the company-specific risk be diversified away by investing in both Primis Financial and Home Bancorp 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 Primis Financial and Home Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primis Financial Corp and Home Bancorp, you can compare the effects of market volatilities on Primis Financial and Home Bancorp 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 Primis Financial with a short position of Home Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primis Financial and Home Bancorp.
Diversification Opportunities for Primis Financial and Home Bancorp
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Primis and Home is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Primis Financial Corp and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Bancorp and Primis Financial 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 Primis Financial Corp are associated (or correlated) with Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of Primis Financial i.e., Primis Financial and Home Bancorp go up and down completely randomly.
Pair Corralation between Primis Financial and Home Bancorp
Given the investment horizon of 90 days Primis Financial is expected to generate 8.53 times less return on investment than Home Bancorp. In addition to that, Primis Financial is 1.29 times more volatile than Home Bancorp. It trades about 0.04 of its total potential returns per unit of risk. Home Bancorp is currently generating about 0.42 per unit of volatility. If you would invest 4,432 in Home Bancorp on November 9, 2024 and sell it today you would earn a total of 817.00 from holding Home Bancorp or generate 18.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Primis Financial Corp vs. Home Bancorp
Performance |
| Timeline |
| Primis Financial Corp |
| Home Bancorp |
Primis Financial and Home Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primis Financial and Home Bancorp
The main advantage of trading using opposite Primis Financial and Home Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primis Financial position performs unexpectedly, Home Bancorp 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 Bancorp will offset losses from the drop in Home Bancorp's long position.| Primis Financial vs. Affinity Bancshares | Primis Financial vs. Home Federal Bancorp | Primis Financial vs. Community West Bancshares | Primis Financial vs. Investar Holding Corp |
| Home Bancorp vs. Home Federal Bancorp | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. First Financial Northwest | Home Bancorp vs. First Capital |
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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