Correlation Between HMN Financial and China CITIC
Can any of the company-specific risk be diversified away by investing in both HMN Financial and China CITIC 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 China CITIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and China CITIC Bank, you can compare the effects of market volatilities on HMN Financial and China CITIC 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 China CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and China CITIC.
Diversification Opportunities for HMN Financial and China CITIC
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HMN and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and China CITIC Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China CITIC Bank 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 China CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China CITIC Bank has no effect on the direction of HMN Financial i.e., HMN Financial and China CITIC go up and down completely randomly.
Pair Corralation between HMN Financial and China CITIC
If you would invest 59.00 in China CITIC Bank on August 28, 2024 and sell it today you would earn a total of 0.00 from holding China CITIC Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMN Financial vs. China CITIC Bank
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| China CITIC Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HMN Financial and China CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and China CITIC
The main advantage of trading using opposite HMN Financial and China CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, China CITIC 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 China CITIC will offset losses from the drop in China CITIC'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 |
| China CITIC vs. Postal Savings Bank | China CITIC vs. China Merchants Bank | China CITIC vs. China Merchants Bank | China CITIC vs. Community West Bancshares |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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