Correlation Between Berkshire Hills and Home Federal
Can any of the company-specific risk be diversified away by investing in both Berkshire Hills and Home Federal 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 Berkshire Hills and Home Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hills Bancorp and Home Federal Bancorp, you can compare the effects of market volatilities on Berkshire Hills and Home Federal 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 Berkshire Hills with a short position of Home Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hills and Home Federal.
Diversification Opportunities for Berkshire Hills and Home Federal
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berkshire and Home is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hills Bancorp and Home Federal Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Federal Bancorp and Berkshire Hills 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 Berkshire Hills Bancorp are associated (or correlated) with Home Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Federal Bancorp has no effect on the direction of Berkshire Hills i.e., Berkshire Hills and Home Federal go up and down completely randomly.
Pair Corralation between Berkshire Hills and Home Federal
Given the investment horizon of 90 days Berkshire Hills Bancorp is expected to generate 0.73 times more return on investment than Home Federal. However, Berkshire Hills Bancorp is 1.37 times less risky than Home Federal. It trades about 0.05 of its potential returns per unit of risk. Home Federal Bancorp is currently generating about -0.08 per unit of risk. If you would invest 2,186 in Berkshire Hills Bancorp on February 23, 2024 and sell it today you would earn a total of 112.00 from holding Berkshire Hills Bancorp or generate 5.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 93.75% |
Values | Daily Returns |
Berkshire Hills Bancorp vs. Home Federal Bancorp
Performance |
Timeline |
Berkshire Hills Bancorp |
Home Federal Bancorp |
Berkshire Hills and Home Federal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Berkshire Hills and Home Federal
The main advantage of trading using opposite Berkshire Hills and Home Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hills position performs unexpectedly, Home Federal 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 Federal will offset losses from the drop in Home Federal's long position.Berkshire Hills vs. HUMANA INC | Berkshire Hills vs. Small Cap Core | Berkshire Hills vs. High Yield Municipal Fund | Berkshire Hills vs. Knife River |
Home Federal vs. HUMANA INC | Home Federal vs. Small Cap Core | Home Federal vs. High Yield Municipal Fund | Home Federal vs. Knife River |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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