Correlation Between Home Bancorp and Hackett
Can any of the company-specific risk be diversified away by investing in both Home Bancorp and Hackett 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 Home Bancorp and Hackett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Bancorp and The Hackett Group, you can compare the effects of market volatilities on Home Bancorp and Hackett 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 Home Bancorp with a short position of Hackett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Bancorp and Hackett.
Diversification Opportunities for Home Bancorp and Hackett
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and Hackett is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Home Bancorp and The Hackett Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hackett Group and Home Bancorp 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 Home Bancorp are associated (or correlated) with Hackett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hackett Group has no effect on the direction of Home Bancorp i.e., Home Bancorp and Hackett go up and down completely randomly.
Pair Corralation between Home Bancorp and Hackett
Given the investment horizon of 90 days Home Bancorp is expected to generate 1.11 times less return on investment than Hackett. In addition to that, Home Bancorp is 1.23 times more volatile than The Hackett Group. It trades about 0.04 of its total potential returns per unit of risk. The Hackett Group is currently generating about 0.05 per unit of volatility. If you would invest 2,169 in The Hackett Group on August 27, 2024 and sell it today you would earn a total of 951.00 from holding The Hackett Group or generate 43.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Bancorp vs. The Hackett Group
Performance |
| Timeline |
| Home Bancorp |
| Hackett Group |
Home Bancorp and Hackett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Bancorp and Hackett
The main advantage of trading using opposite Home Bancorp and Hackett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Bancorp position performs unexpectedly, Hackett 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 Hackett will offset losses from the drop in Hackett's long position.| Home Bancorp vs. Home Federal Bancorp | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. First Financial Northwest | Home Bancorp vs. First Capital |
| Hackett vs. Information Services Group | Hackett vs. Home Bancorp | Hackett vs. Heritage Financial | Hackett vs. CRA International |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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