Correlation Between 1895 Of and Home Federal

Can any of the company-specific risk be diversified away by investing in both 1895 Of 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 1895 Of and Home Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1895 of Wisconsin and Home Federal Bancorp, you can compare the effects of market volatilities on 1895 Of 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 1895 Of with a short position of Home Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1895 Of and Home Federal.

Diversification Opportunities for 1895 Of and Home Federal

-0.21

Correlation Coefficient

1895 Of  Home Federal

Very good diversification

The 3 months correlation between 1895 and Home is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding 1895 of Wisconsin 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 1895 Of 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 1895 of Wisconsin 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 1895 Of i.e., 1895 Of and Home Federal go up and down completely randomly.

Pair Corralation between 1895 Of and Home Federal

Given the investment horizon of 90 days 1895 Of is expected to generate 100.67 times less return on investment than Home Federal. But when comparing it to its historical volatility, 1895 of Wisconsin is 23.71 times less risky than Home Federal. It trades about 0.01 of its potential returns per unit of risk. Home Federal Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,711  in Home Federal Bancorp on September 20, 2024 and sell it today you would lose (451.00) from holding Home Federal Bancorp or give up 26.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.99%
Values	Daily Returns

1895 of Wisconsin  vs.  Home Federal Bancorp

1895 of Wisconsin

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 1895 of Wisconsin are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, 1895 Of may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Home Federal Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Home Federal Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with 1895 Of and Home Federal

The main advantage of trading using opposite 1895 Of and Home Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1895 Of 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.

The idea behind 1895 of Wisconsin and Home Federal Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.