Correlation Between Eagle Bancorp and Enterprise Bancorp
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Enterprise Bancorp 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 Enterprise Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp and Enterprise Bancorp, you can compare the effects of market volatilities on Eagle Bancorp and Enterprise Bancorp 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 Enterprise Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Enterprise Bancorp.
Diversification Opportunities for Eagle Bancorp and Enterprise Bancorp
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eagle and Enterprise is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and Enterprise Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Bancorp 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 Enterprise Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enterprise Bancorp has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Enterprise Bancorp go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Enterprise Bancorp
Given the investment horizon of 90 days Eagle Bancorp is expected to under-perform the Enterprise Bancorp. In addition to that, Eagle Bancorp is 1.47 times more volatile than Enterprise Bancorp. It trades about 0.0 of its total potential returns per unit of risk. Enterprise Bancorp is currently generating about 0.02 per unit of volatility. If you would invest 3,248 in Enterprise Bancorp on August 24, 2024 and sell it today you would earn a total of 395.00 from holding Enterprise Bancorp or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp vs. Enterprise Bancorp
Performance |
| Timeline |
| Eagle Bancorp |
| Enterprise Bancorp |
Eagle Bancorp and Enterprise Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Enterprise Bancorp
The main advantage of trading using opposite Eagle Bancorp and Enterprise Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Enterprise Bancorp 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 Enterprise Bancorp will offset losses from the drop in Enterprise Bancorp's long position.| Eagle Bancorp vs. Peoples Bancorp | Eagle Bancorp vs. Northrim BanCorp | Eagle Bancorp vs. United Bankshares | Eagle Bancorp vs. Pacific Premier Bancorp |
| Enterprise Bancorp vs. Waterstone Financial | Enterprise Bancorp vs. Mid Penn Bancorp | Enterprise Bancorp vs. ST Bancorp | Enterprise Bancorp vs. Republic 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 CEOs Directory module to screen CEOs from public companies around the world.
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