Correlation Between HMN Financial and Catalyst Bancorp
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Catalyst Bancorp 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 Catalyst Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Catalyst Bancorp, you can compare the effects of market volatilities on HMN Financial and Catalyst Bancorp 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 Catalyst Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Catalyst Bancorp.
Diversification Opportunities for HMN Financial and Catalyst Bancorp
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between HMN and Catalyst is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Catalyst Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst 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 Catalyst Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Bancorp has no effect on the direction of HMN Financial i.e., HMN Financial and Catalyst Bancorp go up and down completely randomly.
Pair Corralation between HMN Financial and Catalyst Bancorp
Given the investment horizon of 90 days HMN Financial is expected to generate 1.61 times more return on investment than Catalyst Bancorp. However, HMN Financial is 1.61 times more volatile than Catalyst Bancorp. It trades about 0.04 of its potential returns per unit of risk. Catalyst Bancorp is currently generating about -0.01 per unit of risk. If you would invest 2,142 in HMN Financial on November 2, 2024 and sell it today you would earn a total of 657.00 from holding HMN Financial or generate 30.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 83.81% |
| Values | Daily Returns |
HMN Financial vs. Catalyst Bancorp
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Catalyst Bancorp |
HMN Financial and Catalyst Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Catalyst Bancorp
The main advantage of trading using opposite HMN Financial and Catalyst Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Catalyst Bancorp 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 Catalyst Bancorp will offset losses from the drop in Catalyst Bancorp'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 |
| Catalyst Bancorp vs. SVB T Corp | Catalyst Bancorp vs. First Capital | Catalyst Bancorp vs. Pioneer Bankcorp | Catalyst Bancorp vs. Liberty Northwest Bancorp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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