Correlation Between Home Federal and Wake Forest
Can any of the company-specific risk be diversified away by investing in both Home Federal and Wake Forest 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 Wake Forest 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 Wake Forest Bancshares, you can compare the effects of market volatilities on Home Federal and Wake Forest 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 Wake Forest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Federal and Wake Forest.
Diversification Opportunities for Home Federal and Wake Forest
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Home and Wake is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Home Federal Bancorp and Wake Forest Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wake Forest Bancshares 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 Wake Forest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wake Forest Bancshares has no effect on the direction of Home Federal i.e., Home Federal and Wake Forest go up and down completely randomly.
Pair Corralation between Home Federal and Wake Forest
If you would invest 1,234 in Home Federal Bancorp on January 6, 2025 and sell it today you would earn a total of 76.00 from holding Home Federal Bancorp or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Home Federal Bancorp vs. Wake Forest Bancshares
Performance |
| Timeline |
| Home Federal Bancorp |
| Wake Forest Bancshares |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Home Federal and Wake Forest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Federal and Wake Forest
The main advantage of trading using opposite Home Federal and Wake Forest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Federal position performs unexpectedly, Wake Forest 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 Wake Forest will offset losses from the drop in Wake Forest's long position.| Home Federal vs. Camden National | Home Federal vs. Bank of Marin | Home Federal vs. Arrow Financial | Home Federal vs. Auburn National Bancorporation |
| Wake Forest vs. Home Federal Bancorp | Wake Forest vs. First Capital | Wake Forest vs. Magyar Bancorp | Wake Forest vs. Oak Valley 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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