Correlation Between HMN Financial and Bank of South
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Bank of South 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 Bank of South into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Bank of South, you can compare the effects of market volatilities on HMN Financial and Bank of South 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 Bank of South. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Bank of South.
Diversification Opportunities for HMN Financial and Bank of South
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between HMN and Bank is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Bank of South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of South 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 Bank of South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of South has no effect on the direction of HMN Financial i.e., HMN Financial and Bank of South go up and down completely randomly.
Pair Corralation between HMN Financial and Bank of South
If you would invest 1,367 in Bank of South on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Bank of South or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMN Financial vs. Bank of South
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Bank of South |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HMN Financial and Bank of South Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Bank of South
The main advantage of trading using opposite HMN Financial and Bank of South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Bank of South 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 Bank of South will offset losses from the drop in Bank of South's long position.| HMN Financial vs. Magyar Bancorp | HMN Financial vs. Home Federal Bancorp | HMN Financial vs. First Financial Northwest | HMN Financial vs. First Northwest Bancorp |
| Bank of South vs. Auburn National Bancorporation | Bank of South vs. Bank of Marin | Bank of South vs. Ames National | Bank of South vs. CF Financial |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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