Correlation Between Eagle Bancorp and Atlantic Union
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Atlantic Union 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 Atlantic Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp and Atlantic Union Bankshares, you can compare the effects of market volatilities on Eagle Bancorp and Atlantic Union 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 Atlantic Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Atlantic Union.
Diversification Opportunities for Eagle Bancorp and Atlantic Union
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eagle and Atlantic is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and Atlantic Union Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Union Bankshares 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 are associated (or correlated) with Atlantic Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Union Bankshares has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Atlantic Union go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Atlantic Union
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 1.02 times less return on investment than Atlantic Union. In addition to that, Eagle Bancorp is 1.06 times more volatile than Atlantic Union Bankshares. It trades about 0.14 of its total potential returns per unit of risk. Atlantic Union Bankshares is currently generating about 0.16 per unit of volatility. If you would invest 3,804 in Atlantic Union Bankshares on August 31, 2024 and sell it today you would earn a total of 420.00 from holding Atlantic Union Bankshares or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp vs. Atlantic Union Bankshares
Performance |
| Timeline |
| Eagle Bancorp |
| Atlantic Union Bankshares |
Eagle Bancorp and Atlantic Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Atlantic Union
The main advantage of trading using opposite Eagle Bancorp and Atlantic Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Atlantic Union 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 Atlantic Union will offset losses from the drop in Atlantic Union's long position.| Eagle Bancorp vs. Peoples Bancorp | Eagle Bancorp vs. Northrim BanCorp | Eagle Bancorp vs. United Bankshares | Eagle Bancorp vs. Pacific Premier Bancorp |
| Atlantic Union vs. KeyCorp | Atlantic Union vs. Comerica | Atlantic Union vs. First Horizon National | Atlantic Union vs. Western Alliance Bancorporation |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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