Correlation Between Sandy Spring and Eagle Bancorp
Can any of the company-specific risk be diversified away by investing in both Sandy Spring and Eagle Bancorp 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 Sandy Spring and Eagle Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandy Spring Bancorp and Eagle Bancorp, you can compare the effects of market volatilities on Sandy Spring and Eagle Bancorp 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 Sandy Spring with a short position of Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandy Spring and Eagle Bancorp.
Diversification Opportunities for Sandy Spring and Eagle Bancorp
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sandy and Eagle is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Sandy Spring Bancorp and Eagle Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp and Sandy Spring 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 Sandy Spring Bancorp are associated (or correlated) with Eagle Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bancorp has no effect on the direction of Sandy Spring i.e., Sandy Spring and Eagle Bancorp go up and down completely randomly.
Pair Corralation between Sandy Spring and Eagle Bancorp
Given the investment horizon of 90 days Sandy Spring Bancorp is expected to under-perform the Eagle Bancorp. In addition to that, Sandy Spring is 1.03 times more volatile than Eagle Bancorp. It trades about 0.0 of its total potential returns per unit of risk. Eagle Bancorp is currently generating about 0.04 per unit of volatility. If you would invest 2,603 in Eagle Bancorp on November 1, 2024 and sell it today you would earn a total of 39.00 from holding Eagle Bancorp or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Sandy Spring Bancorp vs. Eagle Bancorp
Performance |
| Timeline |
| Sandy Spring Bancorp |
| Eagle Bancorp |
Sandy Spring and Eagle Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandy Spring and Eagle Bancorp
The main advantage of trading using opposite Sandy Spring and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandy Spring position performs unexpectedly, Eagle Bancorp 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 Bancorp will offset losses from the drop in Eagle Bancorp's long position.| Sandy Spring vs. Northrim BanCorp | Sandy Spring vs. Provident Financial Services | Sandy Spring vs. Community Trust Bancorp | Sandy Spring vs. First Interstate BancSystem |
| Eagle Bancorp vs. Peoples Bancorp | Eagle Bancorp vs. Northrim BanCorp | Eagle Bancorp vs. United Bankshares | Eagle Bancorp vs. Pacific Premier 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |