Correlation Between HomeTrust Bancshares, and City Office

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

Diversification Opportunities for HomeTrust Bancshares, and City Office

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between HomeTrust and City is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding HomeTrust Bancshares, and City Office REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Office REIT 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 City Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Office REIT has no effect on the direction of HomeTrust Bancshares, i.e., HomeTrust Bancshares, and City Office go up and down completely randomly.

Pair Corralation between HomeTrust Bancshares, and City Office

Considering the 90-day investment horizon HomeTrust Bancshares, is expected to generate 0.97 times more return on investment than City Office. However, HomeTrust Bancshares, is 1.03 times less risky than City Office. It trades about 0.07 of its potential returns per unit of risk. City Office REIT is currently generating about 0.05 per unit of risk. If you would invest  2,383  in HomeTrust Bancshares, on August 27, 2025 and sell it today you would earn a total of  1,635  from holding HomeTrust Bancshares, or generate 68.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.79%
ValuesDaily Returns

HomeTrust Bancshares,  vs.  City Office REIT

 Performance 
       Timeline  
HomeTrust Bancshares, 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days HomeTrust Bancshares, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HomeTrust Bancshares, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
City Office REIT 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days City Office REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, City Office is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

HomeTrust Bancshares, and City Office Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HomeTrust Bancshares, and City Office

The main advantage of trading using opposite HomeTrust Bancshares, and City Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeTrust Bancshares, position performs unexpectedly, City Office 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 City Office will offset losses from the drop in City Office's long position.
The idea behind HomeTrust Bancshares, and City Office REIT 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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