Correlation Between HomeTrust Bancshares, and First Foundation

Can any of the company-specific risk be diversified away by investing in both HomeTrust Bancshares, and First Foundation 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 First Foundation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HomeTrust Bancshares, and First Foundation, you can compare the effects of market volatilities on HomeTrust Bancshares, and First Foundation 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 First Foundation. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeTrust Bancshares, and First Foundation.

Diversification Opportunities for HomeTrust Bancshares, and First Foundation

0.79

Correlation Coefficient

HomeTrust Bancshares,  First Foundation

Poor diversification

The 3 months correlation between HomeTrust and First is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares, and First Foundation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Foundation 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 First Foundation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Foundation has no effect on the direction of HomeTrust Bancshares, i.e., HomeTrust Bancshares, and First Foundation go up and down completely randomly.

Pair Corralation between HomeTrust Bancshares, and First Foundation

Considering the 90-day investment horizon HomeTrust Bancshares, is expected to generate 0.64 times more return on investment than First Foundation. However, HomeTrust Bancshares, is 1.57 times less risky than First Foundation. It trades about 0.19 of its potential returns per unit of risk. First Foundation is currently generating about 0.07 per unit of risk. If you would invest  3,318  in HomeTrust Bancshares, on April 20, 2025 and sell it today you would earn a total of  579.00  from holding HomeTrust Bancshares, or generate 17.45% 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.  First Foundation

HomeTrust Bancshares,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HomeTrust Bancshares, are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, HomeTrust Bancshares, sustained solid returns over the last few months and may actually be approaching a breakup point.

First Foundation

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in First Foundation are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, First Foundation may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with HomeTrust Bancshares, and First Foundation

The main advantage of trading using opposite HomeTrust Bancshares, and First Foundation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeTrust Bancshares, position performs unexpectedly, First Foundation 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 First Foundation will offset losses from the drop in First Foundation's long position.

The idea behind HomeTrust Bancshares, and First Foundation 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.