Correlation Between HomeTrust Bancshares and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both HomeTrust Bancshares and JPMorgan Chase 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 JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeTrust Bancshares and JPMorgan Chase Co, you can compare the effects of market volatilities on HomeTrust Bancshares and JPMorgan Chase 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 JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeTrust Bancshares and JPMorgan Chase.
Diversification Opportunities for HomeTrust Bancshares and JPMorgan Chase
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HomeTrust and JPMorgan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase 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 JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of HomeTrust Bancshares i.e., HomeTrust Bancshares and JPMorgan Chase go up and down completely randomly.
Pair Corralation between HomeTrust Bancshares and JPMorgan Chase
Given the investment horizon of 90 days HomeTrust Bancshares is expected to generate 1.64 times more return on investment than JPMorgan Chase. However, HomeTrust Bancshares is 1.64 times more volatile than JPMorgan Chase Co. It trades about 0.11 of its potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.13 per unit of risk. If you would invest 2,182 in HomeTrust Bancshares on June 21, 2024 and sell it today you would earn a total of 1,474 from holding HomeTrust Bancshares or generate 67.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
HomeTrust Bancshares vs. JPMorgan Chase Co
Performance |
Timeline |
HomeTrust Bancshares |
JPMorgan Chase |
HomeTrust Bancshares and JPMorgan Chase Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HomeTrust Bancshares and JPMorgan Chase
The main advantage of trading using opposite HomeTrust Bancshares and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeTrust Bancshares position performs unexpectedly, JPMorgan Chase 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 JPMorgan Chase will offset losses from the drop in JPMorgan Chase's long position.HomeTrust Bancshares vs. HMN Financial | HomeTrust Bancshares vs. First Northwest Bancorp | HomeTrust Bancshares vs. Community West Bancshares | HomeTrust Bancshares vs. First Financial Northwest |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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