Correlation Between Virginia National and Eagle Bancorp
Can any of the company-specific risk be diversified away by investing in both Virginia National 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 Virginia National and Eagle Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virginia National Bankshares and Eagle Bancorp, you can compare the effects of market volatilities on Virginia National 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 Virginia National with a short position of Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Eagle Bancorp.
Diversification Opportunities for Virginia National and Eagle Bancorp
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virginia and Eagle is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Eagle Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp and Virginia National 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 Virginia National Bankshares 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 Virginia National i.e., Virginia National and Eagle Bancorp go up and down completely randomly.
Pair Corralation between Virginia National and Eagle Bancorp
Given the investment horizon of 90 days Virginia National Bankshares is expected to generate 0.81 times more return on investment than Eagle Bancorp. However, Virginia National Bankshares is 1.23 times less risky than Eagle Bancorp. It trades about 0.03 of its potential returns per unit of risk. Eagle Bancorp is currently generating about 0.02 per unit of risk. If you would invest 3,228 in Virginia National Bankshares on November 9, 2024 and sell it today you would earn a total of 477.00 from holding Virginia National Bankshares or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. Eagle Bancorp
Performance |
| Timeline |
| Virginia National |
| Eagle Bancorp |
Virginia National and Eagle Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Eagle Bancorp
The main advantage of trading using opposite Virginia National and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National 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.| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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