Correlation Between HMN Financial and Oconee Federal
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Oconee Federal 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 Oconee Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Oconee Federal Financial, you can compare the effects of market volatilities on HMN Financial and Oconee Federal 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 Oconee Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Oconee Federal.
Diversification Opportunities for HMN Financial and Oconee Federal
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HMN and Oconee is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Oconee Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Federal 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 Oconee Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Federal Financial has no effect on the direction of HMN Financial i.e., HMN Financial and Oconee Federal go up and down completely randomly.
Pair Corralation between HMN Financial and Oconee Federal
If you would invest 1,974 in HMN Financial on August 27, 2024 and sell it today you would earn a total of 825.00 from holding HMN Financial or generate 41.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.64% |
| Values | Daily Returns |
HMN Financial vs. Oconee Federal Financial
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Oconee Federal Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HMN Financial and Oconee Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Oconee Federal
The main advantage of trading using opposite HMN Financial and Oconee Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Oconee Federal 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 Oconee Federal will offset losses from the drop in Oconee Federal'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 |
| Oconee Federal vs. Home Federal Bancorp | Oconee Federal vs. Community West Bancshares | Oconee Federal vs. Magyar 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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