Correlation Between Northfield Bancorp and Home Bancorp
Can any of the company-specific risk be diversified away by investing in both Northfield Bancorp and Home Bancorp 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 Northfield Bancorp and Home Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northfield Bancorp and Home Bancorp, you can compare the effects of market volatilities on Northfield Bancorp and Home Bancorp 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 Northfield Bancorp with a short position of Home Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northfield Bancorp and Home Bancorp.
Diversification Opportunities for Northfield Bancorp and Home Bancorp
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Northfield and Home is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Northfield Bancorp and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Bancorp and Northfield 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 Northfield Bancorp are associated (or correlated) with Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of Northfield Bancorp i.e., Northfield Bancorp and Home Bancorp go up and down completely randomly.
Pair Corralation between Northfield Bancorp and Home Bancorp
Given the investment horizon of 90 days Northfield Bancorp is expected to generate 1.21 times more return on investment than Home Bancorp. However, Northfield Bancorp is 1.21 times more volatile than Home Bancorp. It trades about 0.14 of its potential returns per unit of risk. Home Bancorp is currently generating about 0.12 per unit of risk. If you would invest 875.00 in Northfield Bancorp on August 25, 2024 and sell it today you would earn a total of 503.00 from holding Northfield Bancorp or generate 57.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northfield Bancorp vs. Home Bancorp
Performance |
| Timeline |
| Northfield Bancorp |
| Home Bancorp |
Northfield Bancorp and Home Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northfield Bancorp and Home Bancorp
The main advantage of trading using opposite Northfield Bancorp and Home Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northfield Bancorp position performs unexpectedly, Home Bancorp 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 Home Bancorp will offset losses from the drop in Home Bancorp's long position.| Northfield Bancorp vs. Finward Bancorp | Northfield Bancorp vs. Community West Bancshares | Northfield Bancorp vs. First Financial Northwest | Northfield Bancorp vs. Home Bancorp |
| Home Bancorp vs. Home Federal Bancorp | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. First Financial Northwest | Home Bancorp vs. First Capital |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |