Correlation Between Northeast Community and HMN Financial
Can any of the company-specific risk be diversified away by investing in both Northeast Community 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 Northeast Community and HMN Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northeast Community Bancorp and HMN Financial, you can compare the effects of market volatilities on Northeast Community 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 Northeast Community with a short position of HMN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northeast Community and HMN Financial.
Diversification Opportunities for Northeast Community and HMN Financial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northeast and HMN is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Northeast Community Bancorp and HMN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMN Financial and Northeast Community 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 Northeast Community Bancorp 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 Northeast Community i.e., Northeast Community and HMN Financial go up and down completely randomly.
Pair Corralation between Northeast Community and HMN Financial
If you would invest 2,682 in Northeast Community Bancorp on August 31, 2024 and sell it today you would earn a total of 326.00 from holding Northeast Community Bancorp or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Northeast Community Bancorp vs. HMN Financial
Performance |
| Timeline |
| Northeast Community |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Northeast Community and HMN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northeast Community and HMN Financial
The main advantage of trading using opposite Northeast Community and HMN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northeast Community 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.| Northeast Community vs. Community West Bancshares | Northeast Community vs. First Financial Northwest | Northeast Community vs. First Capital | Northeast Community vs. HomeTrust Bancshares |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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