Correlation Between HMN Financial and Amalgamated Bank

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Can any of the company-specific risk be diversified away by investing in both HMN Financial and Amalgamated Bank 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 HMN Financial and Amalgamated Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMN Financial and Amalgamated Bank, you can compare the effects of market volatilities on HMN Financial and Amalgamated Bank 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 HMN Financial with a short position of Amalgamated Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMN Financial and Amalgamated Bank.

Diversification Opportunities for HMN Financial and Amalgamated Bank

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between HMN and Amalgamated is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding HMN Financial and Amalgamated Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amalgamated Bank and HMN 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 HMN Financial are associated (or correlated) with Amalgamated Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amalgamated Bank has no effect on the direction of HMN Financial i.e., HMN Financial and Amalgamated Bank go up and down completely randomly.

Pair Corralation between HMN Financial and Amalgamated Bank

If you would invest  2,799  in HMN Financial on October 10, 2024 and sell it today you would earn a total of  0.00  from holding HMN Financial or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy5.0%
ValuesDaily Returns

HMN Financial  vs.  Amalgamated Bank

 Performance 
       Timeline  
HMN Financial 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Amalgamated Bank 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Amalgamated Bank are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Amalgamated Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

HMN Financial and Amalgamated Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HMN Financial and Amalgamated Bank

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

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