Correlation Between Brookline Bancorp and Eagle Bancorp

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Brookline Bancorp  vs.  Eagle Bancorp

 Performance 
       Timeline  
Brookline Bancorp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Brookline Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
Eagle Bancorp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Eagle Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

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.
The idea behind Brookline Bancorp and Eagle Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
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
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Bonds Directory
Find actively traded corporate debentures issued by US companies