Correlation Between Comerica and HomeTrust Bancshares

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Comerica 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 Comerica and HomeTrust Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and HomeTrust Bancshares, you can compare the effects of market volatilities on Comerica 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 Comerica with a short position of HomeTrust Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and HomeTrust Bancshares.

Diversification Opportunities for Comerica and HomeTrust Bancshares

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Comerica and HomeTrust is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Comerica and HomeTrust Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeTrust Bancshares and Comerica 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 Comerica 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 Comerica i.e., Comerica and HomeTrust Bancshares go up and down completely randomly.

Pair Corralation between Comerica and HomeTrust Bancshares

Considering the 90-day investment horizon Comerica is expected to under-perform the HomeTrust Bancshares. In addition to that, Comerica is 1.05 times more volatile than HomeTrust Bancshares. It trades about -0.42 of its total potential returns per unit of risk. HomeTrust Bancshares is currently generating about -0.35 per unit of volatility. If you would invest  3,827  in HomeTrust Bancshares on September 26, 2024 and sell it today you would lose (414.00) from holding HomeTrust Bancshares or give up 10.82% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Comerica  vs.  HomeTrust Bancshares

 Performance 
       Timeline  
Comerica 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Comerica are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent primary indicators, Comerica may actually be approaching a critical reversion point that can send shares even higher in January 2025.
HomeTrust Bancshares 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in HomeTrust Bancshares are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, HomeTrust Bancshares is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Comerica and HomeTrust Bancshares Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Comerica and HomeTrust Bancshares

The main advantage of trading using opposite Comerica and HomeTrust Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica 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 Comerica 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.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators