Correlation Between Brookline Bancorp and Eagle Bancorp
Can any of the company-specific risk be diversified away by investing in both Brookline Bancorp 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 Brookline Bancorp and Eagle Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookline Bancorp and Eagle Bancorp, you can compare the effects of market volatilities on Brookline Bancorp 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 Brookline Bancorp with a short position of Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookline Bancorp and Eagle Bancorp.
Diversification Opportunities for Brookline Bancorp and Eagle Bancorp
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brookline and Eagle is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Brookline Bancorp and Eagle Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp and Brookline 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 Brookline 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 Brookline Bancorp i.e., Brookline Bancorp and Eagle Bancorp go up and down completely randomly.
Pair Corralation between Brookline Bancorp and Eagle Bancorp
Given the investment horizon of 90 days Brookline Bancorp is expected to generate 0.78 times more return on investment than Eagle Bancorp. However, Brookline Bancorp is 1.28 times less risky than Eagle Bancorp. It trades about -0.02 of its potential returns per unit of risk. Eagle Bancorp is currently generating about -0.04 per unit of risk. If you would invest 1,361 in Brookline Bancorp on December 29, 2023 and sell it today you would lose (386.00) from holding Brookline Bancorp or give up 28.36% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Brookline Bancorp vs. Eagle Bancorp
Performance |
Timeline |
Brookline Bancorp |
Eagle Bancorp |
Brookline Bancorp and Eagle Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brookline Bancorp and Eagle Bancorp
The main advantage of trading using opposite Brookline Bancorp and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookline Bancorp 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.Brookline Bancorp vs. Merchants Bancorp | Brookline Bancorp vs. Macatawa Bank | Brookline Bancorp vs. Axos Financial | Brookline Bancorp vs. Regions Financial |
Eagle Bancorp vs. Merchants Bancorp | Eagle Bancorp vs. Macatawa Bank | Eagle Bancorp vs. Axos Financial | Eagle Bancorp vs. Regions Financial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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