Correlation Between Eastern Bankshares and HarborOne Bancorp
Can any of the company-specific risk be diversified away by investing in both Eastern Bankshares and HarborOne Bancorp 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 Eastern Bankshares and HarborOne Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Bankshares and HarborOne Bancorp, you can compare the effects of market volatilities on Eastern Bankshares and HarborOne Bancorp 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 Eastern Bankshares with a short position of HarborOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Bankshares and HarborOne Bancorp.
Diversification Opportunities for Eastern Bankshares and HarborOne Bancorp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eastern and HarborOne is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Bankshares and HarborOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HarborOne Bancorp and Eastern Bankshares 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 Eastern Bankshares are associated (or correlated) with HarborOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HarborOne Bancorp has no effect on the direction of Eastern Bankshares i.e., Eastern Bankshares and HarborOne Bancorp go up and down completely randomly.
Pair Corralation between Eastern Bankshares and HarborOne Bancorp
Considering the 90-day investment horizon Eastern Bankshares is expected to generate 0.95 times more return on investment than HarborOne Bancorp. However, Eastern Bankshares is 1.05 times less risky than HarborOne Bancorp. It trades about 0.08 of its potential returns per unit of risk. HarborOne Bancorp is currently generating about 0.04 per unit of risk. If you would invest 1,199 in Eastern Bankshares on September 14, 2024 and sell it today you would earn a total of 595.00 from holding Eastern Bankshares or generate 49.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Bankshares vs. HarborOne Bancorp
Performance |
| Timeline |
| Eastern Bankshares |
| HarborOne Bancorp |
Eastern Bankshares and HarborOne Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Bankshares and HarborOne Bancorp
The main advantage of trading using opposite Eastern Bankshares and HarborOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Bankshares position performs unexpectedly, HarborOne Bancorp 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 HarborOne Bancorp will offset losses from the drop in HarborOne Bancorp's long position.| Eastern Bankshares vs. Comerica | Eastern Bankshares vs. Fifth Third Bancorp | Eastern Bankshares vs. Zions Bancorporation | Eastern Bankshares vs. PNC Financial Services |
| HarborOne Bancorp vs. Independent Bank | HarborOne Bancorp vs. Richmond Mutual Bancorporation | HarborOne Bancorp vs. Berkshire Hills Bancorp | HarborOne Bancorp vs. Southern Missouri 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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