Correlation Between Eagle Bancorp and Peoples Bancorp
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Peoples 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 Peoples 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 Peoples Bancorp, you can compare the effects of market volatilities on Eagle Bancorp and Peoples 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 Peoples Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Peoples Bancorp.
Diversification Opportunities for Eagle Bancorp and Peoples Bancorp
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eagle and Peoples is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and Peoples Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples 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 Peoples Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Bancorp has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Peoples Bancorp go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Peoples Bancorp
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 1.19 times less return on investment than Peoples Bancorp. In addition to that, Eagle Bancorp is 1.06 times more volatile than Peoples Bancorp. It trades about 0.17 of its total potential returns per unit of risk. Peoples Bancorp is currently generating about 0.22 per unit of volatility. If you would invest 3,114 in Peoples Bancorp on August 27, 2024 and sell it today you would earn a total of 488.00 from holding Peoples Bancorp or generate 15.67% 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. Peoples Bancorp
Performance |
| Timeline |
| Eagle Bancorp |
| Peoples Bancorp |
Eagle Bancorp and Peoples Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Peoples Bancorp
The main advantage of trading using opposite Eagle Bancorp and Peoples Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Peoples 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 Peoples Bancorp will offset losses from the drop in Peoples Bancorp's long position.| Eagle Bancorp vs. Fifth Third Bancorp | Eagle Bancorp vs. Zions Bancorporation | Eagle Bancorp vs. Huntington Bancshares Incorporated | Eagle Bancorp vs. Comerica |
| Peoples Bancorp vs. Eagle Bancorp | Peoples Bancorp vs. Northrim BanCorp | Peoples Bancorp vs. United Bankshares | Peoples Bancorp vs. Pacific Premier 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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