Correlation Between Eagle Bancorp and First Interstate
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and First Interstate 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 First Interstate 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 First Interstate BancSystem, you can compare the effects of market volatilities on Eagle Bancorp and First Interstate 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 First Interstate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and First Interstate.
Diversification Opportunities for Eagle Bancorp and First Interstate
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eagle and First is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and First Interstate BancSystem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Interstate Ban 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 First Interstate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Interstate Ban has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and First Interstate go up and down completely randomly.
Pair Corralation between Eagle Bancorp and First Interstate
Given the investment horizon of 90 days Eagle Bancorp Montana is expected to generate 0.7 times more return on investment than First Interstate. However, Eagle Bancorp Montana is 1.43 times less risky than First Interstate. It trades about 0.17 of its potential returns per unit of risk. First Interstate BancSystem is currently generating about 0.09 per unit of risk. If you would invest 1,477 in Eagle Bancorp Montana on November 3, 2024 and sell it today you would earn a total of 63.00 from holding Eagle Bancorp Montana or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp Montana vs. First Interstate BancSystem
Performance |
| Timeline |
| Eagle Bancorp Montana |
| First Interstate Ban |
Eagle Bancorp and First Interstate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and First Interstate
The main advantage of trading using opposite Eagle Bancorp and First Interstate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, First Interstate 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 First Interstate will offset losses from the drop in First Interstate'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 |
| First Interstate vs. First Financial Bankshares | First Interstate vs. CVB Financial | First Interstate vs. Eagle Bancorp Montana | First Interstate vs. Glacier 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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