Correlation Between HMN Financial and Ottawa Savings
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Ottawa Savings 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 Ottawa Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Ottawa Savings Bancorp, you can compare the effects of market volatilities on HMN Financial and Ottawa Savings 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 Ottawa Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Ottawa Savings.
Diversification Opportunities for HMN Financial and Ottawa Savings
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between HMN and Ottawa is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Ottawa Savings Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ottawa Savings Bancorp 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 Ottawa Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ottawa Savings Bancorp has no effect on the direction of HMN Financial i.e., HMN Financial and Ottawa Savings go up and down completely randomly.
Pair Corralation between HMN Financial and Ottawa Savings
If you would invest 1,285 in Ottawa Savings Bancorp on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Ottawa Savings Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMN Financial vs. Ottawa Savings Bancorp
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Ottawa Savings Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HMN Financial and Ottawa Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Ottawa Savings
The main advantage of trading using opposite HMN Financial and Ottawa Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Ottawa Savings 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 Ottawa Savings will offset losses from the drop in Ottawa Savings' 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 |
| Ottawa Savings vs. Lake Shore Bancorp | Ottawa Savings vs. IF Bancorp | Ottawa Savings vs. Home Federal 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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