Correlation Between HMN Financial and HomeTrust Bancshares
Can any of the company-specific risk be diversified away by investing in both HMN Financial and HomeTrust Bancshares 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 HomeTrust Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and HomeTrust Bancshares, you can compare the effects of market volatilities on HMN Financial and HomeTrust Bancshares 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 HomeTrust Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and HomeTrust Bancshares.
Diversification Opportunities for HMN Financial and HomeTrust Bancshares
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HMN and HomeTrust is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares 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 HomeTrust Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeTrust Bancshares has no effect on the direction of HMN Financial i.e., HMN Financial and HomeTrust Bancshares go up and down completely randomly.
Pair Corralation between HMN Financial and HomeTrust Bancshares
If you would invest 3,293 in HomeTrust Bancshares on August 27, 2024 and sell it today you would earn a total of 475.00 from holding HomeTrust Bancshares or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
HMN Financial vs. HomeTrust Bancshares
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| HomeTrust Bancshares |
HMN Financial and HomeTrust Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and HomeTrust Bancshares
The main advantage of trading using opposite HMN Financial and HomeTrust Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, HomeTrust Bancshares 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 HomeTrust Bancshares will offset losses from the drop in HomeTrust Bancshares' 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 |
| HomeTrust Bancshares vs. First Northwest Bancorp | HomeTrust Bancshares vs. Community West Bancshares | HomeTrust Bancshares vs. First Financial Northwest | HomeTrust Bancshares vs. Great Southern 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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