Correlation Between Virginia National and HMN Financial
Can any of the company-specific risk be diversified away by investing in both Virginia National 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 Virginia National and HMN Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virginia National Bankshares and HMN Financial, you can compare the effects of market volatilities on Virginia National 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 Virginia National with a short position of HMN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and HMN Financial.
Diversification Opportunities for Virginia National and HMN Financial
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virginia and HMN is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and HMN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMN Financial and Virginia National 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 Virginia National Bankshares 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 Virginia National i.e., Virginia National and HMN Financial go up and down completely randomly.
Pair Corralation between Virginia National and HMN Financial
If you would invest 2,799 in HMN Financial on November 2, 2024 and sell it today you would earn a total of 0.00 from holding HMN Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. HMN Financial
Performance |
| Timeline |
| Virginia National |
| HMN Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Virginia National and HMN Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and HMN Financial
The main advantage of trading using opposite Virginia National and HMN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National 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.| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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