Correlation Between CB Financial and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both CB Financial and Eagle Financial 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 CB Financial and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CB Financial Services and Eagle Financial Services, you can compare the effects of market volatilities on CB Financial and Eagle Financial 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 CB Financial with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CB Financial and Eagle Financial.
Diversification Opportunities for CB Financial and Eagle Financial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CBFV and Eagle is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CB Financial Services and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services and CB Financial 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 CB Financial Services are associated (or correlated) with Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of CB Financial i.e., CB Financial and Eagle Financial go up and down completely randomly.
Pair Corralation between CB Financial and Eagle Financial
Given the investment horizon of 90 days CB Financial is expected to generate 1.14 times less return on investment than Eagle Financial. In addition to that, CB Financial is 1.37 times more volatile than Eagle Financial Services. It trades about 0.07 of its total potential returns per unit of risk. Eagle Financial Services is currently generating about 0.11 per unit of volatility. If you would invest 3,300 in Eagle Financial Services on August 25, 2024 and sell it today you would earn a total of 170.00 from holding Eagle Financial Services or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
CB Financial Services vs. Eagle Financial Services
Performance |
| Timeline |
| CB Financial Services |
| Eagle Financial Services |
CB Financial and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CB Financial and Eagle Financial
The main advantage of trading using opposite CB Financial and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CB Financial position performs unexpectedly, Eagle Financial 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 Eagle Financial will offset losses from the drop in Eagle Financial's long position.| CB Financial vs. Fifth Third Bancorp | CB Financial vs. Zions Bancorporation | CB Financial vs. Huntington Bancshares Incorporated | CB Financial vs. PNC Financial Services |
| Eagle Financial vs. Chesapeake Finl Shs | Eagle Financial vs. Taylor Calvin B | Eagle Financial vs. PSB Holdings | Eagle Financial vs. Farmers Merchants Bancorp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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