Correlation Between PNC Financial and HomeTrust Bancshares
Can any of the company-specific risk be diversified away by investing in both PNC Financial and HomeTrust 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 PNC Financial and HomeTrust Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PNC Financial Services and HomeTrust Bancshares, you can compare the effects of market volatilities on PNC Financial and HomeTrust 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 PNC Financial with a short position of HomeTrust Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and HomeTrust Bancshares.
Diversification Opportunities for PNC Financial and HomeTrust Bancshares
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PNC and HomeTrust is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding PNC Financial Services and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares and PNC Financial 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 PNC Financial Services are associated (or correlated) with HomeTrust Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeTrust Bancshares has no effect on the direction of PNC Financial i.e., PNC Financial and HomeTrust Bancshares go up and down completely randomly.
Pair Corralation between PNC Financial and HomeTrust Bancshares
Considering the 90-day investment horizon PNC Financial is expected to generate 1.43 times less return on investment than HomeTrust Bancshares. But when comparing it to its historical volatility, PNC Financial Services is 1.23 times less risky than HomeTrust Bancshares. It trades about 0.04 of its potential returns per unit of risk. HomeTrust Bancshares is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,294 in HomeTrust Bancshares on September 26, 2024 and sell it today you would earn a total of 1,119 from holding HomeTrust Bancshares or generate 48.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
PNC Financial Services vs. HomeTrust Bancshares
Performance |
Timeline |
PNC Financial Services |
HomeTrust Bancshares |
PNC Financial and HomeTrust Bancshares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PNC Financial and HomeTrust Bancshares
The main advantage of trading using opposite PNC Financial and HomeTrust Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial position performs unexpectedly, HomeTrust 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 HomeTrust Bancshares will offset losses from the drop in HomeTrust Bancshares' long position.PNC Financial vs. Truist Financial Corp | PNC Financial vs. KeyCorp | PNC Financial vs. Western Alliance Bancorporation | PNC Financial vs. Zions Bancorporation |
HomeTrust Bancshares vs. First Northwest Bancorp | HomeTrust Bancshares vs. Community West Bancshares | HomeTrust Bancshares vs. First Financial Northwest | HomeTrust Bancshares vs. Great Southern Bancorp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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