Correlation Between Hilltop Holdings and HMN Financial
Can any of the company-specific risk be diversified away by investing in both Hilltop Holdings and HMN 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 Hilltop Holdings and HMN Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilltop Holdings and HMN Financial, you can compare the effects of market volatilities on Hilltop Holdings and HMN 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 Hilltop Holdings with a short position of HMN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilltop Holdings and HMN Financial.
Diversification Opportunities for Hilltop Holdings and HMN Financial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hilltop and HMN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hilltop Holdings and HMN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMN Financial and Hilltop Holdings 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 Hilltop Holdings are associated (or correlated) with HMN Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMN Financial has no effect on the direction of Hilltop Holdings i.e., Hilltop Holdings and HMN Financial go up and down completely randomly.
Pair Corralation between Hilltop Holdings and HMN Financial
If you would invest 2,884 in Hilltop Holdings on October 20, 2024 and sell it today you would earn a total of 6.00 from holding Hilltop Holdings or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Hilltop Holdings vs. HMN Financial
Performance |
| Timeline |
| Hilltop Holdings |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hilltop Holdings and HMN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilltop Holdings and HMN Financial
The main advantage of trading using opposite Hilltop Holdings and HMN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilltop Holdings position performs unexpectedly, HMN 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 HMN Financial will offset losses from the drop in HMN Financial's long position.| Hilltop Holdings vs. Home Federal Bancorp | Hilltop Holdings vs. First Financial Northwest | Hilltop Holdings vs. First Northwest Bancorp | Hilltop Holdings vs. First Capital |
| HMN Financial vs. Magyar Bancorp | HMN Financial vs. Home Federal Bancorp | HMN Financial vs. First Financial Northwest | HMN Financial vs. First Northwest 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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