Correlation Between HMN Financial and Harbor Bankshares
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Harbor Bankshares 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 Harbor Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Harbor Bankshares, you can compare the effects of market volatilities on HMN Financial and Harbor Bankshares 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 Harbor Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Harbor Bankshares.
Diversification Opportunities for HMN Financial and Harbor Bankshares
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HMN and Harbor is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Bankshares 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 Harbor Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Bankshares has no effect on the direction of HMN Financial i.e., HMN Financial and Harbor Bankshares go up and down completely randomly.
Pair Corralation between HMN Financial and Harbor Bankshares
Given the investment horizon of 90 days HMN Financial is expected to generate 0.61 times more return on investment than Harbor Bankshares. However, HMN Financial is 1.63 times less risky than Harbor Bankshares. It trades about 0.06 of its potential returns per unit of risk. Harbor Bankshares is currently generating about -0.01 per unit of risk. If you would invest 1,947 in HMN Financial on September 12, 2024 and sell it today you would earn a total of 852.00 from holding HMN Financial or generate 43.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.33% |
| Values | Daily Returns |
HMN Financial vs. Harbor Bankshares
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Harbor Bankshares |
HMN Financial and Harbor Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Harbor Bankshares
The main advantage of trading using opposite HMN Financial and Harbor Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Harbor Bankshares 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 Harbor Bankshares will offset losses from the drop in Harbor Bankshares' 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 |
| Harbor Bankshares vs. PT Bank Rakyat | Harbor Bankshares vs. Morningstar Unconstrained Allocation | Harbor Bankshares vs. Bondbloxx ETF Trust | Harbor Bankshares vs. Spring Valley Acquisition |
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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