Correlation Between HMN Financial and Oak Valley
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Oak Valley 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 Oak Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Oak Valley Bancorp, you can compare the effects of market volatilities on HMN Financial and Oak Valley 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 Oak Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Oak Valley.
Diversification Opportunities for HMN Financial and Oak Valley
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HMN and Oak is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Oak Valley Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Valley 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 Oak Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Valley Bancorp has no effect on the direction of HMN Financial i.e., HMN Financial and Oak Valley go up and down completely randomly.
Pair Corralation between HMN Financial and Oak Valley
If you would invest 2,799 in HMN Financial on November 2, 2024 and sell it today you would earn a total of 0.00 from holding HMN Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
HMN Financial vs. Oak Valley Bancorp
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Oak Valley Bancorp |
HMN Financial and Oak Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Oak Valley
The main advantage of trading using opposite HMN Financial and Oak Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Oak Valley 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 Oak Valley will offset losses from the drop in Oak Valley'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 |
| Oak Valley vs. Home Federal Bancorp | Oak Valley vs. Lake Shore Bancorp | Oak Valley vs. Community West Bancshares | Oak Valley 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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