Correlation Between Evans Bancorp and Eastern
Can any of the company-specific risk be diversified away by investing in both Evans Bancorp and Eastern 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 Evans Bancorp and Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evans Bancorp and Eastern Co, you can compare the effects of market volatilities on Evans Bancorp and Eastern 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 Evans Bancorp with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evans Bancorp and Eastern.
Diversification Opportunities for Evans Bancorp and Eastern
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Evans and Eastern is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Evans Bancorp and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and Evans 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 Evans Bancorp are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Evans Bancorp i.e., Evans Bancorp and Eastern go up and down completely randomly.
Pair Corralation between Evans Bancorp and Eastern
Given the investment horizon of 90 days Evans Bancorp is expected to generate 0.89 times more return on investment than Eastern. However, Evans Bancorp is 1.12 times less risky than Eastern. It trades about 0.18 of its potential returns per unit of risk. Eastern Co is currently generating about 0.14 per unit of risk. If you would invest 4,183 in Evans Bancorp on November 9, 2024 and sell it today you would earn a total of 278.00 from holding Evans Bancorp or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evans Bancorp vs. Eastern Co
Performance |
| Timeline |
| Evans Bancorp |
| Eastern |
Evans Bancorp and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evans Bancorp and Eastern
The main advantage of trading using opposite Evans Bancorp and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evans Bancorp position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Evans Bancorp vs. First Community | Evans Bancorp vs. Oak Valley Bancorp | Evans Bancorp vs. First Financial Northwest | Evans Bancorp vs. ESSA Bancorp |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |