Correlation Between Bank Central and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Bank Central and Eagle Financial 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 Bank Central and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Eagle Financial Services, you can compare the effects of market volatilities on Bank Central and Eagle Financial 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 Bank Central with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Eagle Financial.
Diversification Opportunities for Bank Central and Eagle Financial
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Eagle is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services and Bank Central 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 Bank Central Asia are associated (or correlated) with Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of Bank Central i.e., Bank Central and Eagle Financial go up and down completely randomly.
Pair Corralation between Bank Central and Eagle Financial
Assuming the 90 days horizon Bank Central is expected to generate 4.7 times less return on investment than Eagle Financial. In addition to that, Bank Central is 1.11 times more volatile than Eagle Financial Services. It trades about 0.02 of its total potential returns per unit of risk. Eagle Financial Services is currently generating about 0.09 per unit of volatility. If you would invest 2,914 in Eagle Financial Services on September 1, 2024 and sell it today you would earn a total of 636.00 from holding Eagle Financial Services or generate 21.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 88.83% |
| Values | Daily Returns |
Bank Central Asia vs. Eagle Financial Services
Performance |
| Timeline |
| Bank Central Asia |
| Eagle Financial Services |
Bank Central and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Eagle Financial
The main advantage of trading using opposite Bank Central and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Eagle Financial 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 Eagle Financial will offset losses from the drop in Eagle Financial's long position.| Bank Central vs. Piraeus Bank SA | Bank Central vs. Turkiye Garanti Bankasi | Bank Central vs. Delhi Bank Corp | Bank Central vs. Uwharrie Capital Corp |
| Eagle Financial vs. Chesapeake Finl Shs | Eagle Financial vs. Taylor Calvin B | Eagle Financial vs. PSB Holdings | Eagle Financial vs. Farmers Merchants 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |