Correlation Between HMN Financial and Home Bancorp
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Home 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 Home 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 Home Bancorp, you can compare the effects of market volatilities on HMN Financial and Home 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 Home Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Home Bancorp.
Diversification Opportunities for HMN Financial and Home Bancorp
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HMN and Home is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home 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 Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of HMN Financial i.e., HMN Financial and Home Bancorp go up and down completely randomly.
Pair Corralation between HMN Financial and Home Bancorp
If you would invest 4,625 in Home Bancorp on August 24, 2024 and sell it today you would earn a total of 266.00 from holding Home Bancorp or generate 5.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
HMN Financial vs. Home Bancorp
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Home Bancorp |
HMN Financial and Home Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Home Bancorp
The main advantage of trading using opposite HMN Financial and Home Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Home 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 Home Bancorp will offset losses from the drop in Home 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 |
| Home Bancorp vs. Home Federal Bancorp | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. First Financial Northwest | Home Bancorp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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