Correlation Between Eagle Bancorp and JPMorgan Chase
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and JPMorgan Chase 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 JPMorgan Chase into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp and JPMorgan Chase Co, you can compare the effects of market volatilities on Eagle Bancorp and JPMorgan Chase 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 JPMorgan Chase. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and JPMorgan Chase.
Diversification Opportunities for Eagle Bancorp and JPMorgan Chase
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eagle and JPMorgan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and JPMorgan Chase Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Chase 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 JPMorgan Chase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Chase has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and JPMorgan Chase go up and down completely randomly.
Pair Corralation between Eagle Bancorp and JPMorgan Chase
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 1.37 times less return on investment than JPMorgan Chase. In addition to that, Eagle Bancorp is 2.24 times more volatile than JPMorgan Chase Co. It trades about 0.03 of its total potential returns per unit of risk. JPMorgan Chase Co is currently generating about 0.11 per unit of volatility. If you would invest 15,139 in JPMorgan Chase Co on September 12, 2024 and sell it today you would earn a total of 9,147 from holding JPMorgan Chase Co or generate 60.42% 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. JPMorgan Chase Co
Performance |
| Timeline |
| Eagle Bancorp |
| JPMorgan Chase |
Eagle Bancorp and JPMorgan Chase Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and JPMorgan Chase
The main advantage of trading using opposite Eagle Bancorp and JPMorgan Chase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, JPMorgan Chase 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 JPMorgan Chase will offset losses from the drop in JPMorgan Chase's long position.| Eagle Bancorp vs. Peoples Bancorp | Eagle Bancorp vs. Northrim BanCorp | Eagle Bancorp vs. United Bankshares | Eagle Bancorp vs. Pacific Premier Bancorp |
| JPMorgan Chase vs. Bank of America | JPMorgan Chase vs. Victory Integrity Smallmid Cap | JPMorgan Chase vs. Hilton Worldwide Holdings | JPMorgan Chase vs. NVIDIA |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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