Correlation Between HMN Financial and Main Street
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Main Street 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 Main Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Main Street Financial, you can compare the effects of market volatilities on HMN Financial and Main Street 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 Main Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Main Street.
Diversification Opportunities for HMN Financial and Main Street
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HMN and Main is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Main Street Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main Street Financial 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 Main Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main Street Financial has no effect on the direction of HMN Financial i.e., HMN Financial and Main Street go up and down completely randomly.
Pair Corralation between HMN Financial and Main Street
Given the investment horizon of 90 days HMN Financial is expected to generate 0.89 times more return on investment than Main Street. However, HMN Financial is 1.13 times less risky than Main Street. It trades about 0.04 of its potential returns per unit of risk. Main Street Financial is currently generating about 0.0 per unit of risk. If you would invest 2,141 in HMN Financial on November 5, 2024 and sell it today you would earn a total of 658.00 from holding HMN Financial or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 83.77% |
| Values | Daily Returns |
HMN Financial vs. Main Street Financial
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Main Street Financial |
HMN Financial and Main Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Main Street
The main advantage of trading using opposite HMN Financial and Main Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Main Street 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 Main Street will offset losses from the drop in Main Street'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 |
| Main Street vs. CCFNB Bancorp | Main Street vs. Burke Herbert Financial | Main Street vs. First IC | Main Street vs. Enterprise Financial Services |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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