Correlation Between HomeTrust Bancshares and Lake Shore
Can any of the company-specific risk be diversified away by investing in both HomeTrust Bancshares and Lake Shore 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 Lake Shore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeTrust Bancshares and Lake Shore Bancorp, you can compare the effects of market volatilities on HomeTrust Bancshares and Lake Shore 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 Lake Shore. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeTrust Bancshares and Lake Shore.
Diversification Opportunities for HomeTrust Bancshares and Lake Shore
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HomeTrust and Lake is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares and Lake Shore Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lake Shore Bancorp 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 Lake Shore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lake Shore Bancorp has no effect on the direction of HomeTrust Bancshares i.e., HomeTrust Bancshares and Lake Shore go up and down completely randomly.
Pair Corralation between HomeTrust Bancshares and Lake Shore
Given the investment horizon of 90 days HomeTrust Bancshares is expected to generate 1.32 times more return on investment than Lake Shore. However, HomeTrust Bancshares is 1.32 times more volatile than Lake Shore Bancorp. It trades about 0.06 of its potential returns per unit of risk. Lake Shore Bancorp is currently generating about 0.07 per unit of risk. If you would invest 3,576 in HomeTrust Bancshares on August 28, 2024 and sell it today you would earn a total of 251.00 from holding HomeTrust Bancshares or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.83% |
| Values | Daily Returns |
HomeTrust Bancshares vs. Lake Shore Bancorp
Performance |
| Timeline |
| HomeTrust Bancshares |
| Lake Shore Bancorp |
HomeTrust Bancshares and Lake Shore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeTrust Bancshares and Lake Shore
The main advantage of trading using opposite HomeTrust Bancshares and Lake Shore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeTrust Bancshares position performs unexpectedly, Lake Shore 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 Lake Shore will offset losses from the drop in Lake Shore'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 |
| Lake Shore vs. Home Federal Bancorp | Lake Shore vs. Magyar Bancorp | Lake Shore 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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