Correlation Between Primis Financial and Home Bancorp

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

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

Diversification Opportunities for Primis Financial and Home Bancorp

0.34

Correlation Coefficient

Primis Financial  Home Bancorp

Weak diversification

The 3 months correlation between Primis and Home is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Primis Financial Corp and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Bancorp and Primis 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 Primis Financial Corp are associated (or correlated) with Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of Primis Financial i.e., Primis Financial and Home Bancorp go up and down completely randomly.

Pair Corralation between Primis Financial and Home Bancorp

Given the investment horizon of 90 days Primis Financial Corp is expected to under-perform the Home Bancorp. In addition to that, Primis Financial is 1.09 times more volatile than Home Bancorp. It trades about -0.12 of its total potential returns per unit of risk. Home Bancorp is currently generating about 0.02 per unit of volatility. If you would invest  4,589  in Home Bancorp on December 27, 2024 and sell it today you would earn a total of  49.00  from holding Home Bancorp or generate 1.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Primis Financial Corp  vs.  Home Bancorp

Primis Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Primis Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Home Bancorp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Home Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Home Bancorp is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Primis Financial and Home Bancorp

The main advantage of trading using opposite Primis Financial and Home Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primis Financial position performs unexpectedly, Home Bancorp 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 Bancorp will offset losses from the drop in Home Bancorp's long position.

The idea behind Primis Financial Corp and Home 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.