Correlation Between HomeTrust Bancshares and First Bancshares,

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

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

Diversification Opportunities for HomeTrust Bancshares and First Bancshares,

0.89

Correlation Coefficient

HomeTrust Bancshares  First Bancshares,

Very poor diversification

The 3 months correlation between HomeTrust and First is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares and The First Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancshares, and HomeTrust 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 HomeTrust Bancshares are associated (or correlated) with First Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancshares, has no effect on the direction of HomeTrust Bancshares i.e., HomeTrust Bancshares and First Bancshares, go up and down completely randomly.

Pair Corralation between HomeTrust Bancshares and First Bancshares,

Given the investment horizon of 90 days HomeTrust Bancshares is expected to under-perform the First Bancshares,. But the stock apears to be less risky and, when comparing its historical volatility, HomeTrust Bancshares is 1.15 times less risky than First Bancshares,. The stock trades about -0.33 of its potential returns per unit of risk. The The First Bancshares, is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  3,658  in The First Bancshares, on October 10, 2024 and sell it today you would lose (235.00) from holding The First Bancshares, or give up 6.42% of portfolio value over 90 days.

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

HomeTrust Bancshares  vs.  The First Bancshares,

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.

First Bancshares,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The First Bancshares, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, First Bancshares, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with HomeTrust Bancshares and First Bancshares,

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

The idea behind HomeTrust Bancshares and The First 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.