Correlation Between HV Bancorp and HomeTrust Bancshares
Can any of the company-specific risk be diversified away by investing in both HV Bancorp and HomeTrust Bancshares 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 HV Bancorp and HomeTrust Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HV Bancorp and HomeTrust Bancshares, you can compare the effects of market volatilities on HV Bancorp and HomeTrust Bancshares 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 HV Bancorp with a short position of HomeTrust Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of HV Bancorp and HomeTrust Bancshares.
Diversification Opportunities for HV Bancorp and HomeTrust Bancshares
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HVBC and HomeTrust is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding HV Bancorp and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares and HV Bancorp 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 HV Bancorp are associated (or correlated) with HomeTrust Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeTrust Bancshares has no effect on the direction of HV Bancorp i.e., HV Bancorp and HomeTrust Bancshares go up and down completely randomly.
Pair Corralation between HV Bancorp and HomeTrust Bancshares
Given the investment horizon of 90 days HV Bancorp is expected to generate 0.71 times more return on investment than HomeTrust Bancshares. However, HV Bancorp is 1.42 times less risky than HomeTrust Bancshares. It trades about 0.23 of its potential returns per unit of risk. HomeTrust Bancshares is currently generating about 0.09 per unit of risk. If you would invest 3,115 in HV Bancorp on August 27, 2024 and sell it today you would earn a total of 345.00 from holding HV Bancorp or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 7.89% |
| Values | Daily Returns |
HV Bancorp vs. HomeTrust Bancshares
Performance |
| Timeline |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HomeTrust Bancshares |
HV Bancorp and HomeTrust Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HV Bancorp and HomeTrust Bancshares
The main advantage of trading using opposite HV Bancorp and HomeTrust Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HV Bancorp position performs unexpectedly, HomeTrust Bancshares 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 HomeTrust Bancshares will offset losses from the drop in HomeTrust Bancshares' long position.| HV Bancorp vs. Magyar Bancorp | HV Bancorp vs. Home Federal Bancorp | HV Bancorp vs. Community West Bancshares | HV Bancorp vs. Lake Shore Bancorp |
| HomeTrust Bancshares vs. First Northwest Bancorp | HomeTrust Bancshares vs. Community West Bancshares | HomeTrust Bancshares vs. First Financial Northwest | HomeTrust Bancshares vs. Great Southern 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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