Correlation Between Home Federal and Partners Bancorp
Can any of the company-specific risk be diversified away by investing in both Home Federal and Partners 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 Federal and Partners Bancorp 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 Partners Bancorp, you can compare the effects of market volatilities on Home Federal and Partners 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 Federal with a short position of Partners Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Federal and Partners Bancorp.
Diversification Opportunities for Home Federal and Partners Bancorp
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Home and Partners is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Home Federal Bancorp and Partners Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Bancorp 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 Partners Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Bancorp has no effect on the direction of Home Federal i.e., Home Federal and Partners Bancorp go up and down completely randomly.
Pair Corralation between Home Federal and Partners Bancorp
Given the investment horizon of 90 days Home Federal Bancorp is expected to generate 17.67 times more return on investment than Partners Bancorp. However, Home Federal is 17.67 times more volatile than Partners Bancorp. It trades about 0.04 of its potential returns per unit of risk. Partners Bancorp is currently generating about -0.05 per unit of risk. If you would invest 1,642 in Home Federal Bancorp on August 28, 2024 and sell it today you would lose (406.00) from holding Home Federal Bancorp or give up 24.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 32.01% |
| Values | Daily Returns |
Home Federal Bancorp vs. Partners Bancorp
Performance |
| Timeline |
| Home Federal Bancorp |
| Partners Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Home Federal and Partners Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Federal and Partners Bancorp
The main advantage of trading using opposite Home Federal and Partners Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Federal position performs unexpectedly, Partners 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 Partners Bancorp will offset losses from the drop in Partners Bancorp's long position.| Home Federal vs. Fifth Third Bancorp | Home Federal vs. Huntington Bancshares Incorporated | Home Federal vs. MT Bank |
| Partners Bancorp vs. Home Federal Bancorp | Partners Bancorp vs. Magyar Bancorp | Partners Bancorp vs. Community West Bancshares | Partners Bancorp vs. Lake Shore 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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