Correlation Between Great Southern and HomeTrust Bancshares
Can any of the company-specific risk be diversified away by investing in both Great Southern 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 Great Southern and HomeTrust Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Southern Bancorp and HomeTrust Bancshares, you can compare the effects of market volatilities on Great Southern 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 Great Southern with a short position of HomeTrust Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Southern and HomeTrust Bancshares.
Diversification Opportunities for Great Southern and HomeTrust Bancshares
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Great and HomeTrust is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Great Southern Bancorp and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares and Great Southern 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 Great Southern Bancorp 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 Great Southern i.e., Great Southern and HomeTrust Bancshares go up and down completely randomly.
Pair Corralation between Great Southern and HomeTrust Bancshares
Given the investment horizon of 90 days Great Southern is expected to generate 1.43 times less return on investment than HomeTrust Bancshares. In addition to that, Great Southern is 1.07 times more volatile than HomeTrust Bancshares. It trades about 0.11 of its total potential returns per unit of risk. HomeTrust Bancshares is currently generating about 0.16 per unit of volatility. If you would invest 3,346 in HomeTrust Bancshares on August 24, 2024 and sell it today you would earn a total of 398.00 from holding HomeTrust Bancshares or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Southern Bancorp vs. HomeTrust Bancshares
Performance |
| Timeline |
| Great Southern Bancorp |
| HomeTrust Bancshares |
Great Southern and HomeTrust Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Southern and HomeTrust Bancshares
The main advantage of trading using opposite Great Southern and HomeTrust Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Southern 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.| Great Southern vs. First Northwest Bancorp | Great Southern vs. Community West Bancshares | Great Southern vs. First Financial Northwest | Great Southern vs. First Capital |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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