Correlation Between Bogota Financial and HMN Financial

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

By analyzing existing cross correlation between Bogota Financial Corp and HMN Financial, you can compare the effects of market volatilities on Bogota Financial 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 Bogota Financial with a short position of HMN Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bogota Financial and HMN Financial.

Diversification Opportunities for Bogota Financial and HMN Financial

0.0

Correlation Coefficient

Bogota Financial  HMN Financial

Pay attention - limited upside

The 3 months correlation between Bogota and HMN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bogota Financial Corp and HMN Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMN Financial and Bogota Financial 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 Bogota Financial Corp 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 Bogota Financial i.e., Bogota Financial and HMN Financial go up and down completely randomly.

Pair Corralation between Bogota Financial and HMN Financial

If you would invest  757.00  in Bogota Financial Corp on December 27, 2024 and sell it today you would earn a total of  11.00  from holding Bogota Financial Corp or generate 1.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Bogota Financial Corp  vs.  HMN Financial

Bogota Financial Corp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bogota Financial Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Bogota Financial is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

HMN Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days HMN Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HMN Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bogota Financial and HMN Financial

The main advantage of trading using opposite Bogota Financial and HMN Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bogota Financial 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.

The idea behind Bogota Financial Corp and HMN Financial 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.