Correlation Between Eagle Bancorp and Bank of Hawaii
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Bank of Hawaii 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 Eagle Bancorp and Bank of Hawaii into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp Montana and Bank of Hawaii, you can compare the effects of market volatilities on Eagle Bancorp and Bank of Hawaii 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 Eagle Bancorp with a short position of Bank of Hawaii. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Bank of Hawaii.
Diversification Opportunities for Eagle Bancorp and Bank of Hawaii
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and Bank is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and Bank of Hawaii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Hawaii and Eagle Bancorp 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 Eagle Bancorp Montana are associated (or correlated) with Bank of Hawaii. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Hawaii has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Bank of Hawaii go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Bank of Hawaii
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 31.12 times less return on investment than Bank of Hawaii. But when comparing it to its historical volatility, Eagle Bancorp Montana is 2.07 times less risky than Bank of Hawaii. It trades about 0.02 of its potential returns per unit of risk. Bank of Hawaii is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 6,603 in Bank of Hawaii on August 25, 2024 and sell it today you would earn a total of 1,425 from holding Bank of Hawaii or generate 21.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp Montana vs. Bank of Hawaii
Performance |
| Timeline |
| Eagle Bancorp Montana |
| Bank of Hawaii |
Eagle Bancorp and Bank of Hawaii Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Bank of Hawaii
The main advantage of trading using opposite Eagle Bancorp and Bank of Hawaii positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Bank of Hawaii 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 Bank of Hawaii will offset losses from the drop in Bank of Hawaii's long position.| Eagle Bancorp vs. Home Federal Bancorp | Eagle Bancorp vs. First Financial Northwest | Eagle Bancorp vs. First Northwest Bancorp | Eagle Bancorp vs. First Capital |
| Bank of Hawaii vs. Central Pacific Financial | Bank of Hawaii vs. Territorial Bancorp | Bank of Hawaii vs. First Bancorp | Bank of Hawaii vs. Hancock Whitney Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |