Correlation Between Eagle Bancorp and First Republic
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and First Republic 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 Republic 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 Republic Bank, you can compare the effects of market volatilities on Eagle Bancorp and First Republic 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 Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and First Republic.
Diversification Opportunities for Eagle Bancorp and First Republic
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eagle and First is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and First Republic go up and down completely randomly.
Pair Corralation between Eagle Bancorp and First Republic
Given the investment horizon of 90 days Eagle Bancorp Montana is expected to generate 0.07 times more return on investment than First Republic. However, Eagle Bancorp Montana is 13.56 times less risky than First Republic. It trades about 0.02 of its potential returns per unit of risk. First Republic Bank is currently generating about -0.05 per unit of risk. If you would invest 1,585 in Eagle Bancorp Montana on August 30, 2024 and sell it today you would earn a total of 157.00 from holding Eagle Bancorp Montana or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 30.85% |
| Values | Daily Returns |
Eagle Bancorp Montana vs. First Republic Bank
Performance |
| Timeline |
| Eagle Bancorp Montana |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eagle Bancorp and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and First Republic
The main advantage of trading using opposite Eagle Bancorp and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, First Republic 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 Republic will offset losses from the drop in First Republic'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 Republic vs. Cincinnati Financial | First Republic vs. Fernhill Beverage | First Republic vs. National Beverage Corp | First Republic vs. QBE Insurance Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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