Correlation Between Eagle Bancorp and Tectonic Financial
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Tectonic 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 Tectonic 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 Tectonic Financial PR, you can compare the effects of market volatilities on Eagle Bancorp and Tectonic 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 Tectonic Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Tectonic Financial.
Diversification Opportunities for Eagle Bancorp and Tectonic Financial
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eagle and Tectonic is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and Tectonic Financial PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tectonic Financial 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 Tectonic Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tectonic Financial has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Tectonic Financial go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Tectonic Financial
Given the investment horizon of 90 days Eagle Bancorp Montana is expected to generate 1.75 times more return on investment than Tectonic Financial. However, Eagle Bancorp is 1.75 times more volatile than Tectonic Financial PR. It trades about 0.26 of its potential returns per unit of risk. Tectonic Financial PR is currently generating about 0.04 per unit of risk. If you would invest 1,525 in Eagle Bancorp Montana on November 18, 2024 and sell it today you would earn a total of 174.00 from holding Eagle Bancorp Montana or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp Montana vs. Tectonic Financial PR
Performance |
| Timeline |
| Eagle Bancorp Montana |
| Tectonic Financial |
Eagle Bancorp and Tectonic Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Tectonic Financial
The main advantage of trading using opposite Eagle Bancorp and Tectonic Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Tectonic 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 Tectonic Financial will offset losses from the drop in Tectonic Financial's long position.| Eagle Bancorp vs. Home Federal Bancorp | Eagle Bancorp vs. Lake Shore Bancorp | Eagle Bancorp vs. Old Point Financial | Eagle Bancorp vs. Parke Bancorp |
| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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