Correlation Between HomeTrust Bancshares and ESH Acquisition
Can any of the company-specific risk be diversified away by investing in both HomeTrust Bancshares and ESH Acquisition 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 ESH Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeTrust Bancshares and ESH Acquisition Corp, you can compare the effects of market volatilities on HomeTrust Bancshares and ESH Acquisition 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 ESH Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeTrust Bancshares and ESH Acquisition.
Diversification Opportunities for HomeTrust Bancshares and ESH Acquisition
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between HomeTrust and ESH is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares and ESH Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESH Acquisition Corp 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 ESH Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESH Acquisition Corp has no effect on the direction of HomeTrust Bancshares i.e., HomeTrust Bancshares and ESH Acquisition go up and down completely randomly.
Pair Corralation between HomeTrust Bancshares and ESH Acquisition
Given the investment horizon of 90 days HomeTrust Bancshares is expected to generate 529.57 times less return on investment than ESH Acquisition. But when comparing it to its historical volatility, HomeTrust Bancshares is 148.0 times less risky than ESH Acquisition. It trades about 0.08 of its potential returns per unit of risk. ESH Acquisition Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 16.00 in ESH Acquisition Corp on November 3, 2024 and sell it today you would lose (7.13) from holding ESH Acquisition Corp or give up 44.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.95% |
| Values | Daily Returns |
HomeTrust Bancshares vs. ESH Acquisition Corp
Performance |
| Timeline |
| HomeTrust Bancshares |
| ESH Acquisition Corp |
HomeTrust Bancshares and ESH Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeTrust Bancshares and ESH Acquisition
The main advantage of trading using opposite HomeTrust Bancshares and ESH Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeTrust Bancshares position performs unexpectedly, ESH Acquisition 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 ESH Acquisition will offset losses from the drop in ESH Acquisition's 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 |
| ESH Acquisition vs. Entegris | ESH Acquisition vs. Boston Properties | ESH Acquisition vs. Vishay Intertechnology | ESH Acquisition vs. Taylor Morn Home |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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