Correlation Between ACNB and Home Bancorp
Can any of the company-specific risk be diversified away by investing in both ACNB and Home 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 ACNB and Home Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACNB Corporation and Home Bancorp, you can compare the effects of market volatilities on ACNB and Home 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 ACNB with a short position of Home Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACNB and Home Bancorp.
Diversification Opportunities for ACNB and Home Bancorp
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ACNB and Home is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Bancorp and ACNB 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 ACNB Corporation are associated (or correlated) with Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of ACNB i.e., ACNB and Home Bancorp go up and down completely randomly.
Pair Corralation between ACNB and Home Bancorp
Given the investment horizon of 90 days ACNB Corporation is expected to under-perform the Home Bancorp. In addition to that, ACNB is 1.31 times more volatile than Home Bancorp. It trades about -0.06 of its total potential returns per unit of risk. Home Bancorp is currently generating about -0.06 per unit of volatility. If you would invest 3,683 in Home Bancorp on January 31, 2024 and sell it today you would lose (126.00) from holding Home Bancorp or give up 3.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ACNB Corp. vs. Home Bancorp
Performance |
Timeline |
ACNB |
Home Bancorp |
ACNB and Home Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ACNB and Home Bancorp
The main advantage of trading using opposite ACNB and Home Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB position performs unexpectedly, Home 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 Home Bancorp will offset losses from the drop in Home Bancorp's long position.ACNB vs. Bankwell Financial Group | ACNB vs. Codorus Valley Bancorp | ACNB vs. Ames National | ACNB vs. Chemung Financial Corp |
Home Bancorp vs. National Bank Holdings | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. Financial Institutions | Home Bancorp vs. Heritage Financial |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |