Correlation Between HomeTrust Bancshares and Primis Financial

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

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

Diversification Opportunities for HomeTrust Bancshares and Primis Financial

0.78

Correlation Coefficient

HomeTrust Bancshares  Primis Financial

Poor diversification

The 3 months correlation between HomeTrust and Primis is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares and Primis Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primis Financial Corp 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 Primis Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primis Financial Corp has no effect on the direction of HomeTrust Bancshares i.e., HomeTrust Bancshares and Primis Financial go up and down completely randomly.

Pair Corralation between HomeTrust Bancshares and Primis Financial

Given the investment horizon of 90 days HomeTrust Bancshares is expected to generate 1.21 times more return on investment than Primis Financial. However, HomeTrust Bancshares is 1.21 times more volatile than Primis Financial Corp. It trades about -0.04 of its potential returns per unit of risk. Primis Financial Corp is currently generating about -0.08 per unit of risk. If you would invest  3,764  in HomeTrust Bancshares on September 7, 2024 and sell it today you would lose (72.00) from holding HomeTrust Bancshares or give up 1.91% of portfolio value over 90 days.

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

HomeTrust Bancshares  vs.  Primis Financial Corp

HomeTrust Bancshares

Risk-Adjusted Performance

4 of 100

Insignificant

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

Primis Financial Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Primis Financial Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Primis Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HomeTrust Bancshares and Primis Financial

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

The idea behind HomeTrust Bancshares and Primis Financial Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.