Correlation Between Village Bank and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Village Bank 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 Village Bank and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Village Bank and and Eagle Financial Bancorp, you can compare the effects of market volatilities on Village Bank 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 Village Bank with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Bank and Eagle Financial.
Diversification Opportunities for Village Bank and Eagle Financial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Village and Eagle is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Village Bank and and Eagle Financial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Bancorp and Village Bank 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 Village Bank and 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 Bancorp has no effect on the direction of Village Bank i.e., Village Bank and Eagle Financial go up and down completely randomly.
Pair Corralation between Village Bank and Eagle Financial
If you would invest 7,605 in Village Bank and on August 28, 2024 and sell it today you would earn a total of 185.00 from holding Village Bank and or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 7.14% |
| Values | Daily Returns |
Village Bank and vs. Eagle Financial Bancorp
Performance |
| Timeline |
| Village Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Eagle Financial Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Village Bank and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Bank and Eagle Financial
The main advantage of trading using opposite Village Bank and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Bank 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.| Village Bank vs. Fifth Third Bancorp | Village Bank vs. Zions Bancorporation | Village Bank vs. Huntington Bancshares Incorporated | Village Bank vs. Comerica |
| Eagle Financial vs. Enterprise Financial Services | Eagle Financial vs. Pioneer Bancorp | Eagle Financial vs. LCNB Corporation | Eagle Financial vs. Affinity Bancshares |
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 Positions Ratings module to 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.
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