Correlation Between Eagle Bancorp and Trustmark
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Trustmark 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 Trustmark 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 Trustmark, you can compare the effects of market volatilities on Eagle Bancorp and Trustmark 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 Trustmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Trustmark.
Diversification Opportunities for Eagle Bancorp and Trustmark
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eagle and Trustmark is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and Trustmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustmark 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 Trustmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustmark has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Trustmark go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Trustmark
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 1.15 times less return on investment than Trustmark. But when comparing it to its historical volatility, Eagle Bancorp Montana is 2.04 times less risky than Trustmark. It trades about 0.23 of its potential returns per unit of risk. Trustmark is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,297 in Trustmark on September 2, 2024 and sell it today you would earn a total of 614.00 from holding Trustmark or generate 18.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp Montana vs. Trustmark
Performance |
| Timeline |
| Eagle Bancorp Montana |
| Trustmark |
Eagle Bancorp and Trustmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Trustmark
The main advantage of trading using opposite Eagle Bancorp and Trustmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Trustmark 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 Trustmark will offset losses from the drop in Trustmark's long position.| Eagle Bancorp vs. Affinity Bancshares | Eagle Bancorp vs. Auburn National Bancorporation | Eagle Bancorp vs. First Community | Eagle Bancorp vs. LINKBANCORP |
| Trustmark vs. Home Bancorp | Trustmark vs. First Business Financial | Trustmark vs. LINKBANCORP | Trustmark vs. Great Southern 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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