Correlation Between Eagle Bancorp and Third Coast
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Third Coast 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 Third Coast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp and Third Coast Bancshares, you can compare the effects of market volatilities on Eagle Bancorp and Third Coast 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 Third Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Third Coast.
Diversification Opportunities for Eagle Bancorp and Third Coast
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eagle and Third is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and Third Coast Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Coast Bancshares 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 Third Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Coast Bancshares has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Third Coast go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Third Coast
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 2.36 times less return on investment than Third Coast. In addition to that, Eagle Bancorp is 1.44 times more volatile than Third Coast Bancshares. It trades about 0.04 of its total potential returns per unit of risk. Third Coast Bancshares is currently generating about 0.14 per unit of volatility. If you would invest 1,817 in Third Coast Bancshares on August 29, 2024 and sell it today you would earn a total of 1,783 from holding Third Coast Bancshares or generate 98.13% 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. Third Coast Bancshares
Performance |
| Timeline |
| Eagle Bancorp |
| Third Coast Bancshares |
Eagle Bancorp and Third Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Third Coast
The main advantage of trading using opposite Eagle Bancorp and Third Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Third Coast 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 Third Coast will offset losses from the drop in Third Coast's long position.| Eagle Bancorp vs. Peoples Bancorp | Eagle Bancorp vs. Northrim BanCorp | Eagle Bancorp vs. United Bankshares | Eagle Bancorp vs. Pacific Premier Bancorp |
| Third Coast vs. Byline Bancorp | Third Coast vs. Coastal Financial Corp | Third Coast vs. NBT Bancorp | Third Coast vs. Community West Bancshares |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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