Correlation Between HomeTrust Bancshares and Franklin Financial
Can any of the company-specific risk be diversified away by investing in both HomeTrust Bancshares and Franklin 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 Franklin 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 Franklin Financial Services, you can compare the effects of market volatilities on HomeTrust Bancshares and Franklin 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 Franklin Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeTrust Bancshares and Franklin Financial.
Diversification Opportunities for HomeTrust Bancshares and Franklin Financial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HomeTrust and Franklin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares and Franklin Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Financial 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 Franklin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Financial has no effect on the direction of HomeTrust Bancshares i.e., HomeTrust Bancshares and Franklin Financial go up and down completely randomly.
Pair Corralation between HomeTrust Bancshares and Franklin Financial
Given the investment horizon of 90 days HomeTrust Bancshares is expected to generate 1.02 times less return on investment than Franklin Financial. In addition to that, HomeTrust Bancshares is 1.87 times more volatile than Franklin Financial Services. It trades about 0.16 of its total potential returns per unit of risk. Franklin Financial Services is currently generating about 0.31 per unit of volatility. If you would invest 2,961 in Franklin Financial Services on August 24, 2024 and sell it today you would earn a total of 388.00 from holding Franklin Financial Services or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeTrust Bancshares vs. Franklin Financial Services
Performance |
| Timeline |
| HomeTrust Bancshares |
| Franklin Financial |
HomeTrust Bancshares and Franklin Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeTrust Bancshares and Franklin Financial
The main advantage of trading using opposite HomeTrust Bancshares and Franklin Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeTrust Bancshares position performs unexpectedly, Franklin 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 Franklin Financial will offset losses from the drop in Franklin 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 |
| Franklin Financial vs. Magyar Bancorp | Franklin Financial vs. Affinity Bancshares | Franklin Financial vs. Home Federal Bancorp | Franklin Financial vs. Sound Financial 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |