Correlation Between HMN Financial and BankFinancial
Can any of the company-specific risk be diversified away by investing in both HMN Financial and BankFinancial 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 HMN Financial and BankFinancial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and BankFinancial, you can compare the effects of market volatilities on HMN Financial and BankFinancial 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 HMN Financial with a short position of BankFinancial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and BankFinancial.
Diversification Opportunities for HMN Financial and BankFinancial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HMN and BankFinancial is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and BankFinancial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankFinancial and HMN Financial 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 HMN Financial are associated (or correlated) with BankFinancial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankFinancial has no effect on the direction of HMN Financial i.e., HMN Financial and BankFinancial go up and down completely randomly.
Pair Corralation between HMN Financial and BankFinancial
If you would invest 975.00 in BankFinancial on December 5, 2024 and sell it today you would earn a total of 288.00 from holding BankFinancial or generate 29.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
HMN Financial vs. BankFinancial
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| BankFinancial |
HMN Financial and BankFinancial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and BankFinancial
The main advantage of trading using opposite HMN Financial and BankFinancial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, BankFinancial 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 BankFinancial will offset losses from the drop in BankFinancial's long position.| HMN Financial vs. Magyar Bancorp | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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