Correlation Between HMN Financial and Coeur DAlene
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Coeur DAlene 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 Coeur DAlene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Coeur dAlene Bancorp, you can compare the effects of market volatilities on HMN Financial and Coeur DAlene 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 Coeur DAlene. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Coeur DAlene.
Diversification Opportunities for HMN Financial and Coeur DAlene
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HMN and Coeur is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Coeur dAlene Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur dAlene Bancorp 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 Coeur DAlene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur dAlene Bancorp has no effect on the direction of HMN Financial i.e., HMN Financial and Coeur DAlene go up and down completely randomly.
Pair Corralation between HMN Financial and Coeur DAlene
Given the investment horizon of 90 days HMN Financial is expected to generate 1.65 times more return on investment than Coeur DAlene. However, HMN Financial is 1.65 times more volatile than Coeur dAlene Bancorp. It trades about 0.1 of its potential returns per unit of risk. Coeur dAlene Bancorp is currently generating about 0.11 per unit of risk. If you would invest 1,777 in HMN Financial on August 25, 2024 and sell it today you would earn a total of 1,022 from holding HMN Financial or generate 57.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.21% |
| Values | Daily Returns |
HMN Financial vs. Coeur dAlene Bancorp
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Coeur dAlene Bancorp |
HMN Financial and Coeur DAlene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Coeur DAlene
The main advantage of trading using opposite HMN Financial and Coeur DAlene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Coeur DAlene 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 Coeur DAlene will offset losses from the drop in Coeur DAlene'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 |
| Coeur DAlene vs. Standard Bank Group | Coeur DAlene vs. PSB Holdings | Coeur DAlene vs. United Overseas Bank | Coeur DAlene vs. Turkiye Garanti Bankasi |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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