Correlation Between Eagle Bancorp and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Citizens 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 Eagle Bancorp and Citizens Financial 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 Citizens Financial Group,, you can compare the effects of market volatilities on Eagle Bancorp and Citizens 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 Eagle Bancorp with a short position of Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Citizens Financial.
Diversification Opportunities for Eagle Bancorp and Citizens Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eagle and Citizens is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, 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 Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Citizens Financial go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Citizens Financial
Given the investment horizon of 90 days Eagle Bancorp Montana is expected to generate 3.73 times more return on investment than Citizens Financial. However, Eagle Bancorp is 3.73 times more volatile than Citizens Financial Group,. It trades about 0.07 of its potential returns per unit of risk. Citizens Financial Group, is currently generating about 0.17 per unit of risk. If you would invest 1,152 in Eagle Bancorp Montana on August 27, 2024 and sell it today you would earn a total of 554.00 from holding Eagle Bancorp Montana or generate 48.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 33.84% |
| Values | Daily Returns |
Eagle Bancorp Montana vs. Citizens Financial Group,
Performance |
| Timeline |
| Eagle Bancorp Montana |
| Citizens Financial Group, |
Eagle Bancorp and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Citizens Financial
The main advantage of trading using opposite Eagle Bancorp and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Citizens 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 Citizens Financial will offset losses from the drop in Citizens Financial'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 |
| Citizens Financial vs. Axos Financial | Citizens Financial vs. Byline Bancorp | Citizens Financial vs. KB Financial Group | Citizens Financial vs. Nu Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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