Correlation Between Eagle Bancorp and CullenFrost Bankers
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and CullenFrost Bankers 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 CullenFrost Bankers 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 CullenFrost Bankers, you can compare the effects of market volatilities on Eagle Bancorp and CullenFrost Bankers 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 CullenFrost Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and CullenFrost Bankers.
Diversification Opportunities for Eagle Bancorp and CullenFrost Bankers
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eagle and CullenFrost is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and CullenFrost Bankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CullenFrost Bankers 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 CullenFrost Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CullenFrost Bankers has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and CullenFrost Bankers go up and down completely randomly.
Pair Corralation between Eagle Bancorp and CullenFrost Bankers
Given the investment horizon of 90 days Eagle Bancorp Montana is expected to generate 1.63 times more return on investment than CullenFrost Bankers. However, Eagle Bancorp is 1.63 times more volatile than CullenFrost Bankers. It trades about 0.17 of its potential returns per unit of risk. CullenFrost Bankers is currently generating about 0.08 per unit of risk. If you would invest 1,295 in Eagle Bancorp Montana on September 1, 2024 and sell it today you would earn a total of 445.00 from holding Eagle Bancorp Montana or generate 34.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Eagle Bancorp Montana vs. CullenFrost Bankers
Performance |
| Timeline |
| Eagle Bancorp Montana |
| CullenFrost Bankers |
Eagle Bancorp and CullenFrost Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and CullenFrost Bankers
The main advantage of trading using opposite Eagle Bancorp and CullenFrost Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, CullenFrost Bankers 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 CullenFrost Bankers will offset losses from the drop in CullenFrost Bankers' 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 |
| CullenFrost Bankers vs. Fifth Third Bancorp | CullenFrost Bankers vs. Fifth Third Bancorp | CullenFrost Bankers vs. First Citizens BancShares | CullenFrost Bankers vs. Huntington Bancshares Incorporated |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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