Correlation Between Disney and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Disney 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 Disney and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and Eagle Financial Services, you can compare the effects of market volatilities on Disney 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 Disney with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and Eagle Financial.
Diversification Opportunities for Disney and Eagle Financial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Disney and Eagle is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney 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 Disney 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 Walt Disney 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 Disney i.e., Disney and Eagle Financial go up and down completely randomly.
Pair Corralation between Disney and Eagle Financial
Considering the 90-day investment horizon Disney is expected to generate 3.61 times less return on investment than Eagle Financial. In addition to that, Disney is 1.06 times more volatile than Eagle Financial Services. It trades about 0.02 of its total potential returns per unit of risk. Eagle Financial Services is currently generating about 0.09 per unit of volatility. If you would invest 2,914 in Eagle Financial Services on September 1, 2024 and sell it today you would earn a total of 636.00 from holding Eagle Financial Services or generate 21.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.83% |
| Values | Daily Returns |
Walt Disney vs. Eagle Financial Services
Performance |
| Timeline |
| Walt Disney |
| Eagle Financial Services |
Disney and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and Eagle Financial
The main advantage of trading using opposite Disney and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.| Disney vs. ADTRAN Inc | Disney vs. Belden Inc | Disney vs. ADC Therapeutics SA | Disney vs. Comtech Telecommunications Corp |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |