Correlation Between HMN Financial and National Bank
Can any of the company-specific risk be diversified away by investing in both HMN Financial and National Bank 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 National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and National Bank Holdings, you can compare the effects of market volatilities on HMN Financial and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and National Bank.
Diversification Opportunities for HMN Financial and National Bank
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HMN and National is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank Holdings has no effect on the direction of HMN Financial i.e., HMN Financial and National Bank go up and down completely randomly.
Pair Corralation between HMN Financial and National Bank
If you would invest 4,550 in National Bank Holdings on August 28, 2024 and sell it today you would earn a total of 389.00 from holding National Bank Holdings or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
HMN Financial vs. National Bank Holdings
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| National Bank Holdings |
HMN Financial and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and National Bank
The main advantage of trading using opposite HMN Financial and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank'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 |
| National Bank vs. Fifth Third Bancorp | National Bank vs. Zions Bancorporation | National Bank vs. Huntington Bancshares Incorporated | National Bank vs. Comerica |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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