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 |
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 1.57 times less return on investment than Primis Financial. But when comparing it to its historical volatility, HomeTrust Bancshares is 1.05 times less risky than Primis Financial. It trades about 0.06 of its potential returns per unit of risk. Primis Financial Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,106 in Primis Financial Corp on September 7, 2024 and sell it today you would earn a total of 135.00 from holding Primis Financial Corp or generate 12.21% return on investment 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
Performance |
Timeline |
HomeTrust Bancshares |
Primis Financial Corp |
HomeTrust Bancshares and Primis Financial Volatility Contrast
Predicted Return Density |
Returns |
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.Primis Financial vs. Affinity Bancshares | Primis Financial vs. Home Federal Bancorp | Primis Financial vs. Community West Bancshares | Primis Financial vs. Investar Holding Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |