Correlation Between Home Federal and First IC
Can any of the company-specific risk be diversified away by investing in both Home Federal and First IC 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 Federal and First IC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Federal Bancorp and First IC, you can compare the effects of market volatilities on Home Federal and First IC 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 Federal with a short position of First IC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Federal and First IC.
Diversification Opportunities for Home Federal and First IC
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Home and First is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Home Federal Bancorp and First IC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First IC and Home Federal 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 Federal Bancorp are associated (or correlated) with First IC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First IC has no effect on the direction of Home Federal i.e., Home Federal and First IC go up and down completely randomly.
Pair Corralation between Home Federal and First IC
Given the investment horizon of 90 days Home Federal Bancorp is expected to generate 952.68 times more return on investment than First IC. However, Home Federal is 952.68 times more volatile than First IC. It trades about 0.12 of its potential returns per unit of risk. First IC is currently generating about -0.13 per unit of risk. If you would invest 1,250 in Home Federal Bancorp on August 29, 2024 and sell it today you would lose (15.00) from holding Home Federal Bancorp or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Home Federal Bancorp vs. First IC
Performance |
| Timeline |
| Home Federal Bancorp |
| First IC |
Home Federal and First IC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Federal and First IC
The main advantage of trading using opposite Home Federal and First IC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Federal position performs unexpectedly, First IC 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 First IC will offset losses from the drop in First IC's long position.| Home Federal vs. First Northwest Bancorp | Home Federal vs. First Financial Northwest | Home Federal vs. First Capital | Home Federal vs. CF Bankshares |
| First IC vs. CCFNB Bancorp | First IC vs. Glen Burnie Bancorp | First IC vs. Main Street Financial | First IC vs. Enterprise Financial Services |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |