Correlation Between HomeTrust Bancshares and First Financial
Can any of the company-specific risk be diversified away by investing in both HomeTrust Bancshares and First Financial 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 First Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeTrust Bancshares and First Financial Northwest, you can compare the effects of market volatilities on HomeTrust Bancshares and First Financial 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 First Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeTrust Bancshares and First Financial.
Diversification Opportunities for HomeTrust Bancshares and First Financial
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between HomeTrust and First is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares and First Financial Northwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Financial Northwest 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 First Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Financial Northwest has no effect on the direction of HomeTrust Bancshares i.e., HomeTrust Bancshares and First Financial go up and down completely randomly.
Pair Corralation between HomeTrust Bancshares and First Financial
Given the investment horizon of 90 days HomeTrust Bancshares is expected to generate 3.16 times more return on investment than First Financial. However, HomeTrust Bancshares is 3.16 times more volatile than First Financial Northwest. It trades about 0.16 of its potential returns per unit of risk. First Financial Northwest is currently generating about -0.08 per unit of risk. If you would invest 3,346 in HomeTrust Bancshares on August 24, 2024 and sell it today you would earn a total of 398.00 from holding HomeTrust Bancshares or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeTrust Bancshares vs. First Financial Northwest
Performance |
| Timeline |
| HomeTrust Bancshares |
| First Financial Northwest |
HomeTrust Bancshares and First Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeTrust Bancshares and First Financial
The main advantage of trading using opposite HomeTrust Bancshares and First Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeTrust Bancshares position performs unexpectedly, First Financial 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 First Financial will offset losses from the drop in First Financial'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 |
| First Financial vs. Home Federal Bancorp | First Financial vs. First Northwest Bancorp | First Financial vs. First Capital | First Financial 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |