Correlation Between Eagle Bancorp and OptimumBank Holdings
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and OptimumBank Holdings 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 OptimumBank Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp and OptimumBank Holdings, you can compare the effects of market volatilities on Eagle Bancorp and OptimumBank Holdings 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 OptimumBank Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and OptimumBank Holdings.
Diversification Opportunities for Eagle Bancorp and OptimumBank Holdings
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eagle and OptimumBank is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and OptimumBank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptimumBank Holdings 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 OptimumBank Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptimumBank Holdings has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and OptimumBank Holdings go up and down completely randomly.
Pair Corralation between Eagle Bancorp and OptimumBank Holdings
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 0.79 times more return on investment than OptimumBank Holdings. However, Eagle Bancorp is 1.26 times less risky than OptimumBank Holdings. It trades about -0.05 of its potential returns per unit of risk. OptimumBank Holdings is currently generating about -0.05 per unit of risk. If you would invest 2,936 in Eagle Bancorp on September 13, 2024 and sell it today you would lose (42.00) from holding Eagle Bancorp or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp vs. OptimumBank Holdings
Performance |
| Timeline |
| Eagle Bancorp |
| OptimumBank Holdings |
Eagle Bancorp and OptimumBank Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and OptimumBank Holdings
The main advantage of trading using opposite Eagle Bancorp and OptimumBank Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, OptimumBank Holdings 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 OptimumBank Holdings will offset losses from the drop in OptimumBank Holdings' long position.| Eagle Bancorp vs. Comerica | Eagle Bancorp vs. Truist Financial Corp | Eagle Bancorp vs. Fifth Third Bancorp | Eagle Bancorp vs. Zions Bancorporation |
| OptimumBank Holdings vs. First National Bank | OptimumBank Holdings vs. TrustCo Bank Corp | OptimumBank Holdings vs. Inter Co Class | OptimumBank Holdings vs. Rhinebeck 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |