Correlation Between Home Federal and Codorus Valley

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

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

Diversification Opportunities for Home Federal and Codorus Valley

0.0

Correlation Coefficient

Home Federal  Codorus Valley

Pay attention - limited upside

The 3 months correlation between Home and Codorus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Home Federal Bancorp and Codorus Valley Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codorus Valley Bancorp and Home Federal 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 Home Federal Bancorp are associated (or correlated) with Codorus Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codorus Valley Bancorp has no effect on the direction of Home Federal i.e., Home Federal and Codorus Valley go up and down completely randomly.

Pair Corralation between Home Federal and Codorus Valley

If you would invest  1,242  in Home Federal Bancorp on December 28, 2024 and sell it today you would earn a total of  66.00  from holding Home Federal Bancorp or generate 5.31% return on investment over 90 days.

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

Home Federal Bancorp  vs.  Codorus Valley Bancorp

Home Federal Bancorp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Home Federal Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental drivers, Home Federal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Codorus Valley Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Codorus Valley Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Codorus Valley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Home Federal and Codorus Valley

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

The idea behind Home Federal Bancorp and Codorus Valley 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.