Correlation Between South Plains and HMN Financial
Can any of the company-specific risk be diversified away by investing in both South Plains 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 South Plains and HMN Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Plains Financial and HMN Financial, you can compare the effects of market volatilities on South Plains 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 South Plains with a short position of HMN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Plains and HMN Financial.
Diversification Opportunities for South Plains and HMN Financial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between South and HMN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding South Plains Financial and HMN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMN Financial and South Plains 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 South Plains Financial 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 South Plains i.e., South Plains and HMN Financial go up and down completely randomly.
Pair Corralation between South Plains and HMN Financial
If you would invest 3,438 in South Plains Financial on August 30, 2024 and sell it today you would earn a total of 447.00 from holding South Plains Financial or generate 13.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
South Plains Financial vs. HMN Financial
Performance |
| Timeline |
| South Plains Financial |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
South Plains and HMN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Plains and HMN Financial
The main advantage of trading using opposite South Plains and HMN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Plains 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.| South Plains vs. Sound Financial Bancorp | South Plains vs. Finward Bancorp | South Plains vs. Franklin Financial Services | South Plains vs. Community West 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |