Correlation Between Eagle Bancorp and SHF Holdings
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and SHF 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 SHF 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 SHF Holdings, you can compare the effects of market volatilities on Eagle Bancorp and SHF 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 SHF Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and SHF Holdings.
Diversification Opportunities for Eagle Bancorp and SHF Holdings
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eagle and SHF is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and SHF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHF 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 SHF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHF Holdings has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and SHF Holdings go up and down completely randomly.
Pair Corralation between Eagle Bancorp and SHF Holdings
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 0.52 times more return on investment than SHF Holdings. However, Eagle Bancorp is 1.93 times less risky than SHF Holdings. It trades about 0.0 of its potential returns per unit of risk. SHF Holdings is currently generating about -0.05 per unit of risk. If you would invest 3,963 in Eagle Bancorp on August 29, 2024 and sell it today you would lose (1,015) from holding Eagle Bancorp or give up 25.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Eagle Bancorp vs. SHF Holdings
Performance |
| Timeline |
| Eagle Bancorp |
| SHF Holdings |
Eagle Bancorp and SHF Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and SHF Holdings
The main advantage of trading using opposite Eagle Bancorp and SHF Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, SHF 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 SHF Holdings will offset losses from the drop in SHF Holdings' long position.| Eagle Bancorp vs. Peoples Bancorp | Eagle Bancorp vs. Northrim BanCorp | Eagle Bancorp vs. United Bankshares | Eagle Bancorp vs. Pacific Premier Bancorp |
| SHF Holdings vs. Finward Bancorp | SHF Holdings vs. Northfield Bancorp | SHF Holdings vs. Community West Bancshares | SHF Holdings vs. First Community |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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