Correlation Between HomeTrust Bancshares and CrossFirst Bankshares
Can any of the company-specific risk be diversified away by investing in both HomeTrust Bancshares and CrossFirst Bankshares 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 HomeTrust Bancshares and CrossFirst Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeTrust Bancshares and CrossFirst Bankshares, you can compare the effects of market volatilities on HomeTrust Bancshares and CrossFirst Bankshares 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 HomeTrust Bancshares with a short position of CrossFirst Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeTrust Bancshares and CrossFirst Bankshares.
Diversification Opportunities for HomeTrust Bancshares and CrossFirst Bankshares
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HomeTrust and CrossFirst is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares and CrossFirst Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossFirst Bankshares and HomeTrust Bancshares 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 HomeTrust Bancshares are associated (or correlated) with CrossFirst Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossFirst Bankshares has no effect on the direction of HomeTrust Bancshares i.e., HomeTrust Bancshares and CrossFirst Bankshares go up and down completely randomly.
Pair Corralation between HomeTrust Bancshares and CrossFirst Bankshares
Given the investment horizon of 90 days HomeTrust Bancshares is expected to under-perform the CrossFirst Bankshares. But the stock apears to be less risky and, when comparing its historical volatility, HomeTrust Bancshares is 1.58 times less risky than CrossFirst Bankshares. The stock trades about -0.12 of its potential returns per unit of risk. The CrossFirst Bankshares is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,559 in CrossFirst Bankshares on November 29, 2024 and sell it today you would earn a total of 16.00 from holding CrossFirst Bankshares or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
HomeTrust Bancshares vs. CrossFirst Bankshares
Performance |
| Timeline |
| HomeTrust Bancshares |
| CrossFirst Bankshares |
HomeTrust Bancshares and CrossFirst Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeTrust Bancshares and CrossFirst Bankshares
The main advantage of trading using opposite HomeTrust Bancshares and CrossFirst Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeTrust Bancshares position performs unexpectedly, CrossFirst Bankshares 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 CrossFirst Bankshares will offset losses from the drop in CrossFirst Bankshares' long position.| HomeTrust Bancshares vs. First Northwest Bancorp | HomeTrust Bancshares vs. Community West Bancshares | HomeTrust Bancshares vs. First Financial Northwest | HomeTrust Bancshares vs. Great Southern Bancorp |
| CrossFirst Bankshares vs. Home Bancorp | CrossFirst Bankshares vs. Great Southern Bancorp | CrossFirst Bankshares vs. Finward Bancorp | CrossFirst Bankshares vs. Community West Bancshares |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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