Correlation Between Home Bancorp and IF Bancorp
Can any of the company-specific risk be diversified away by investing in both Home Bancorp and IF 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 Home Bancorp and IF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Bancorp and IF Bancorp, you can compare the effects of market volatilities on Home Bancorp and IF 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 Home Bancorp with a short position of IF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Bancorp and IF Bancorp.
Diversification Opportunities for Home Bancorp and IF Bancorp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Home and IROQ is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Home Bancorp and IF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IF Bancorp 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 IF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IF Bancorp has no effect on the direction of Home Bancorp i.e., Home Bancorp and IF Bancorp go up and down completely randomly.
Pair Corralation between Home Bancorp and IF Bancorp
Given the investment horizon of 90 days Home Bancorp is expected to generate 0.96 times more return on investment than IF Bancorp. However, Home Bancorp is 1.04 times less risky than IF Bancorp. It trades about 0.09 of its potential returns per unit of risk. IF Bancorp is currently generating about 0.05 per unit of risk. If you would invest 4,685 in Home Bancorp on August 23, 2024 and sell it today you would earn a total of 206.00 from holding Home Bancorp or generate 4.4% 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. IF Bancorp
Performance |
| Timeline |
| Home Bancorp |
| IF Bancorp |
Home Bancorp and IF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Bancorp and IF Bancorp
The main advantage of trading using opposite Home Bancorp and IF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Bancorp position performs unexpectedly, IF 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 IF Bancorp will offset losses from the drop in IF Bancorp'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 |
| IF Bancorp vs. Home Bancorp | IF Bancorp vs. Commerzbank AG PK | IF Bancorp vs. ConnectOne Bancorp | IF Bancorp vs. Home Federal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |