Correlation Between HomeTrust Bancshares and Peoples Bancorp

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

Diversification Opportunities for HomeTrust Bancshares and Peoples Bancorp

HomeTrustPeoplesDiversified AwayHomeTrustPeoplesDiversified Away100%
0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between HomeTrust and Peoples is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares and Peoples Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Bancorp 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 Peoples Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Bancorp has no effect on the direction of HomeTrust Bancshares i.e., HomeTrust Bancshares and Peoples Bancorp go up and down completely randomly.

Pair Corralation between HomeTrust Bancshares and Peoples Bancorp

Given the investment horizon of 90 days HomeTrust Bancshares is expected to under-perform the Peoples Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, HomeTrust Bancshares is 1.01 times less risky than Peoples Bancorp. The stock trades about -0.05 of its potential returns per unit of risk. The Peoples Bancorp of is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,506  in Peoples Bancorp of on October 15, 2024 and sell it today you would earn a total of  344.00  from holding Peoples Bancorp of or generate 13.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy98.39%
ValuesDaily Returns

HomeTrust Bancshares  vs.  Peoples Bancorp of

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-505101520
JavaScript chart by amCharts 3.21.15HTBI PEBK
       Timeline  
HomeTrust Bancshares 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HomeTrust Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan313233343536373839
Peoples Bancorp 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Peoples Bancorp of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental drivers, Peoples Bancorp disclosed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan252627282930313233

HomeTrust Bancshares and Peoples Bancorp Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.42-5.56-3.7-1.830.03111.863.735.597.45 0.020.030.040.050.060.07
JavaScript chart by amCharts 3.21.15HTBI PEBK
       Returns  

Pair Trading with HomeTrust Bancshares and Peoples Bancorp

The main advantage of trading using opposite HomeTrust Bancshares and Peoples Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeTrust Bancshares position performs unexpectedly, Peoples Bancorp 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 Peoples Bancorp will offset losses from the drop in Peoples Bancorp's long position.
The idea behind HomeTrust Bancshares and Peoples Bancorp of 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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