Correlation Between Eagle Bancorp and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Banco Santander 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 Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp and Banco Santander Brasil, you can compare the effects of market volatilities on Eagle Bancorp and Banco Santander 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 Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Banco Santander.
Diversification Opportunities for Eagle Bancorp and Banco Santander
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eagle and Banco is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and Banco Santander Brasil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Brasil 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 Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander Brasil has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Banco Santander go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Banco Santander
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 2.77 times more return on investment than Banco Santander. However, Eagle Bancorp is 2.77 times more volatile than Banco Santander Brasil. It trades about 0.22 of its potential returns per unit of risk. Banco Santander Brasil is currently generating about -0.35 per unit of risk. If you would invest 2,328 in Eagle Bancorp on August 24, 2024 and sell it today you would earn a total of 547.00 from holding Eagle Bancorp or generate 23.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp vs. Banco Santander Brasil
Performance |
| Timeline |
| Eagle Bancorp |
| Banco Santander Brasil |
Eagle Bancorp and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Banco Santander
The main advantage of trading using opposite Eagle Bancorp and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Banco Santander 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 Banco Santander will offset losses from the drop in Banco Santander's long position.| Eagle Bancorp vs. Peoples Bancorp | Eagle Bancorp vs. Northrim BanCorp | Eagle Bancorp vs. United Bankshares | Eagle Bancorp vs. Pacific Premier Bancorp |
| Banco Santander vs. Banco De Chile | Banco Santander vs. CrossFirst Bankshares | Banco Santander vs. Banco Bradesco SA | Banco Santander vs. CF Bankshares |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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