Correlation Between Wake Forest and Home Federal
Can any of the company-specific risk be diversified away by investing in both Wake Forest and Home Federal 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 Wake Forest and Home Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wake Forest Bancshares and Home Federal Bancorp, you can compare the effects of market volatilities on Wake Forest and Home Federal 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 Wake Forest with a short position of Home Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wake Forest and Home Federal.
Diversification Opportunities for Wake Forest and Home Federal
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wake and Home is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Wake Forest Bancshares and Home Federal Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Federal Bancorp and Wake Forest 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 Wake Forest Bancshares are associated (or correlated) with Home Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Federal Bancorp has no effect on the direction of Wake Forest i.e., Wake Forest and Home Federal go up and down completely randomly.
Pair Corralation between Wake Forest and Home Federal
If you would invest 1,216 in Home Federal Bancorp on September 2, 2024 and sell it today you would earn a total of 20.00 from holding Home Federal Bancorp or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Wake Forest Bancshares vs. Home Federal Bancorp
Performance |
| Timeline |
| Wake Forest Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Home Federal Bancorp |
Wake Forest and Home Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wake Forest and Home Federal
The main advantage of trading using opposite Wake Forest and Home Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wake Forest position performs unexpectedly, Home Federal 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 Federal will offset losses from the drop in Home Federal's long position.| Wake Forest vs. Home Federal Bancorp | Wake Forest vs. First Capital | Wake Forest vs. Magyar Bancorp | Wake Forest vs. Oak Valley Bancorp |
| Home Federal vs. Affinity Bancshares | Home Federal vs. Auburn National Bancorporation | Home Federal vs. BayCom Corp | Home Federal vs. Community West Bancshares |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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