Correlation Between HMN Financial and Bogota Financial
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Bogota Financial 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 Bogota Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Bogota Financial Corp, you can compare the effects of market volatilities on HMN Financial and Bogota Financial 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 Bogota Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Bogota Financial.
Diversification Opportunities for HMN Financial and Bogota Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between HMN and Bogota is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Bogota Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bogota Financial Corp 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 Bogota Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bogota Financial Corp has no effect on the direction of HMN Financial i.e., HMN Financial and Bogota Financial go up and down completely randomly.
Pair Corralation between HMN Financial and Bogota Financial
If you would invest 810.00 in Bogota Financial Corp on August 26, 2024 and sell it today you would earn a total of 11.00 from holding Bogota Financial Corp or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
HMN Financial vs. Bogota Financial Corp
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Bogota Financial Corp |
HMN Financial and Bogota Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Bogota Financial
The main advantage of trading using opposite HMN Financial and Bogota Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Bogota Financial 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 Bogota Financial will offset losses from the drop in Bogota Financial'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 |
| Bogota Financial vs. Home Federal Bancorp | Bogota Financial vs. First Financial Northwest | Bogota Financial vs. First Northwest Bancorp | Bogota Financial vs. First Capital |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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