Correlation Between HTBI Old and First Mid

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

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

Diversification Opportunities for HTBI Old and First Mid

-0.69

Correlation Coefficient

HTBI Old  First Mid

Excellent diversification

The 3 months correlation between HTBI and First is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding HTBI Old and First Mid Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mid Illinois and HTBI Old 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 HTBI Old are associated (or correlated) with First Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mid Illinois has no effect on the direction of HTBI Old i.e., HTBI Old and First Mid go up and down completely randomly.

Pair Corralation between HTBI Old and First Mid

Given the investment horizon of 90 days HTBI Old is expected to generate 1.11 times more return on investment than First Mid. However, HTBI Old is 1.11 times more volatile than First Mid Illinois. It trades about 0.11 of its potential returns per unit of risk. First Mid Illinois is currently generating about -0.05 per unit of risk. If you would invest  3,426  in HTBI Old on December 26, 2024 and sell it today you would earn a total of  229.00  from holding HTBI Old or generate 6.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	63.93%
Values	Daily Returns

HTBI Old  vs.  First Mid Illinois

HTBI Old

Risk-Adjusted Performance

OK

Over the last 90 days HTBI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly fragile fundamental drivers, HTBI Old may actually be approaching a critical reversion point that can send shares even higher in April 2025.

First Mid Illinois

Risk-Adjusted Performance

Very Weak

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

Pair Trading with HTBI Old and First Mid

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

The idea behind HTBI Old and First Mid Illinois 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.