Correlation Between HMN Financial and FS Bancorp
Can any of the company-specific risk be diversified away by investing in both HMN Financial and FS 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 FS 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 FS Bancorp, you can compare the effects of market volatilities on HMN Financial and FS 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 FS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and FS Bancorp.
Diversification Opportunities for HMN Financial and FS Bancorp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HMN and FSBW is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and FS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS 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 FS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Bancorp has no effect on the direction of HMN Financial i.e., HMN Financial and FS Bancorp go up and down completely randomly.
Pair Corralation between HMN Financial and FS Bancorp
If you would invest 4,015 in FS Bancorp on November 3, 2024 and sell it today you would earn a total of 29.00 from holding FS Bancorp or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
HMN Financial vs. FS Bancorp
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FS Bancorp |
HMN Financial and FS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and FS Bancorp
The main advantage of trading using opposite HMN Financial and FS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, FS 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 FS Bancorp will offset losses from the drop in FS 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 |
| FS Bancorp vs. First Community | FS Bancorp vs. Oak Valley Bancorp | FS Bancorp vs. First Financial Northwest | FS Bancorp vs. ESSA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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