Correlation Between HMN Financial and Pioneer Bankcorp
Can any of the company-specific risk be diversified away by investing in both HMN Financial and Pioneer Bankcorp 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 Pioneer Bankcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Pioneer Bankcorp, you can compare the effects of market volatilities on HMN Financial and Pioneer Bankcorp 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 Pioneer Bankcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Pioneer Bankcorp.
Diversification Opportunities for HMN Financial and Pioneer Bankcorp
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HMN and Pioneer is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Pioneer Bankcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bankcorp 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 Pioneer Bankcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Bankcorp has no effect on the direction of HMN Financial i.e., HMN Financial and Pioneer Bankcorp go up and down completely randomly.
Pair Corralation between HMN Financial and Pioneer Bankcorp
Given the investment horizon of 90 days HMN Financial is expected to generate 2.0 times more return on investment than Pioneer Bankcorp. However, HMN Financial is 2.0 times more volatile than Pioneer Bankcorp. It trades about 0.03 of its potential returns per unit of risk. Pioneer Bankcorp is currently generating about 0.04 per unit of risk. If you would invest 2,219 in HMN Financial on August 25, 2024 and sell it today you would earn a total of 580.00 from holding HMN Financial or generate 26.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.76% |
| Values | Daily Returns |
HMN Financial vs. Pioneer Bankcorp
Performance |
| Timeline |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Pioneer Bankcorp |
HMN Financial and Pioneer Bankcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMN Financial and Pioneer Bankcorp
The main advantage of trading using opposite HMN Financial and Pioneer Bankcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMN Financial position performs unexpectedly, Pioneer Bankcorp 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 Pioneer Bankcorp will offset losses from the drop in Pioneer Bankcorp'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 |
| Pioneer Bankcorp vs. Standard Bank Group | Pioneer Bankcorp vs. PSB Holdings | Pioneer Bankcorp vs. United Overseas Bank | Pioneer Bankcorp vs. Turkiye Garanti Bankasi |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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