Correlation Between CFSB Bancorp and Home Federal

Can any of the company-specific risk be diversified away by investing in both CFSB Bancorp 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 CFSB Bancorp and Home Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CFSB Bancorp and Home Federal Bancorp, you can compare the effects of market volatilities on CFSB Bancorp 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 CFSB Bancorp with a short position of Home Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFSB Bancorp and Home Federal.

Diversification Opportunities for CFSB Bancorp and Home Federal

0.22

Correlation Coefficient

CFSB Bancorp  Home Federal

Modest diversification

The 3 months correlation between CFSB and Home is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CFSB 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 CFSB Bancorp 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 CFSB 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 CFSB Bancorp i.e., CFSB Bancorp and Home Federal go up and down completely randomly.

Pair Corralation between CFSB Bancorp and Home Federal

Given the investment horizon of 90 days CFSB Bancorp is expected to generate 4.22 times more return on investment than Home Federal. However, CFSB Bancorp is 4.22 times more volatile than Home Federal Bancorp. It trades about 0.14 of its potential returns per unit of risk. Home Federal Bancorp is currently generating about 0.04 per unit of risk. If you would invest  781.00  in CFSB Bancorp on May 16, 2025 and sell it today you would earn a total of  612.00  from holding CFSB Bancorp or generate 78.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	83.61%
Values	Daily Returns

CFSB Bancorp  vs.  Home Federal Bancorp

CFSB Bancorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CFSB Bancorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, CFSB Bancorp sustained solid returns over the last few months and may actually be approaching a breakup point.

Home Federal Bancorp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Home Federal Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Home Federal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with CFSB Bancorp and Home Federal

The main advantage of trading using opposite CFSB Bancorp and Home Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFSB Bancorp 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.

The idea behind CFSB Bancorp and Home Federal Bancorp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.