Correlation Between Guaranty Bancshares, and HomeTrust Bancshares

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

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

Diversification Opportunities for Guaranty Bancshares, and HomeTrust Bancshares

0.95

Correlation Coefficient

Guaranty Bancshares,  HomeTrust Bancshares

Almost no diversification

The 3 months correlation between Guaranty and HomeTrust is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Bancshares, and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares and Guaranty Bancshares, 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 Guaranty Bancshares, are associated (or correlated) with HomeTrust Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeTrust Bancshares has no effect on the direction of Guaranty Bancshares, i.e., Guaranty Bancshares, and HomeTrust Bancshares go up and down completely randomly.

Pair Corralation between Guaranty Bancshares, and HomeTrust Bancshares

Given the investment horizon of 90 days Guaranty Bancshares, is expected to generate 2.36 times less return on investment than HomeTrust Bancshares. In addition to that, Guaranty Bancshares, is 1.07 times more volatile than HomeTrust Bancshares. It trades about 0.03 of its total potential returns per unit of risk. HomeTrust Bancshares is currently generating about 0.06 per unit of volatility. If you would invest  2,731  in HomeTrust Bancshares on September 19, 2024 and sell it today you would earn a total of  875.00  from holding HomeTrust Bancshares or generate 32.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Guaranty Bancshares,  vs.  HomeTrust Bancshares

Guaranty Bancshares,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Bancshares, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Guaranty Bancshares, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

HomeTrust Bancshares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HomeTrust Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, HomeTrust Bancshares is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Guaranty Bancshares, and HomeTrust Bancshares

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

The idea behind Guaranty Bancshares, and HomeTrust Bancshares 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.