Correlation Between Air T and HomeTrust Bancshares

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

Diversification Opportunities for Air T and HomeTrust Bancshares

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Air and HomeTrust is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air T Inc and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares and Air T 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 Air T Inc 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 Air T i.e., Air T and HomeTrust Bancshares go up and down completely randomly.

Pair Corralation between Air T and HomeTrust Bancshares

Assuming the 90 days horizon Air T Inc is expected to under-perform the HomeTrust Bancshares. In addition to that, Air T is 1.18 times more volatile than HomeTrust Bancshares. It trades about -0.18 of its total potential returns per unit of risk. HomeTrust Bancshares is currently generating about 0.04 per unit of volatility. If you would invest  2,614  in HomeTrust Bancshares on December 29, 2023 and sell it today you would earn a total of  36.00  from holding HomeTrust Bancshares or generate 1.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

Air T Inc  vs.  HomeTrust Bancshares

 Performance 
       Timeline  
Air T Inc 

Risk-Adjusted Performance

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Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Air T Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Air T is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
HomeTrust Bancshares 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days HomeTrust Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, HomeTrust Bancshares is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Air T and HomeTrust Bancshares Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Air T and HomeTrust Bancshares

The main advantage of trading using opposite Air T and HomeTrust Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air T 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.
The idea behind Air T Inc and HomeTrust Bancshares 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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