Correlation Between Eagle Bancorp and Zions Bancorporation
Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Zions Bancorporation 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 Zions Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bancorp and Zions Bancorporation National, you can compare the effects of market volatilities on Eagle Bancorp and Zions Bancorporation 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 Zions Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Zions Bancorporation.
Diversification Opportunities for Eagle Bancorp and Zions Bancorporation
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and Zions is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp and Zions Bancorp. National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation 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 Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Zions Bancorporation go up and down completely randomly.
Pair Corralation between Eagle Bancorp and Zions Bancorporation
Given the investment horizon of 90 days Eagle Bancorp is expected to generate 5.79 times more return on investment than Zions Bancorporation. However, Eagle Bancorp is 5.79 times more volatile than Zions Bancorporation National. It trades about 0.13 of its potential returns per unit of risk. Zions Bancorporation National is currently generating about 0.38 per unit of risk. If you would invest 2,688 in Eagle Bancorp on August 25, 2024 and sell it today you would earn a total of 253.00 from holding Eagle Bancorp or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Bancorp vs. Zions Bancorp. National
Performance |
| Timeline |
| Eagle Bancorp |
| Zions Bancorporation |
Eagle Bancorp and Zions Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bancorp and Zions Bancorporation
The main advantage of trading using opposite Eagle Bancorp and Zions Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Zions Bancorporation 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 Zions Bancorporation will offset losses from the drop in Zions Bancorporation's long position.| Eagle Bancorp vs. Peoples Bancorp | Eagle Bancorp vs. Northrim BanCorp | Eagle Bancorp vs. United Bankshares | Eagle Bancorp vs. Pacific Premier Bancorp |
| Zions Bancorporation vs. Capital One Financial | Zions Bancorporation vs. Capital One Financial | Zions Bancorporation vs. Bank of America | Zions Bancorporation vs. KeyCorp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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