Correlation Between Affinity Bancshares and Eagle Bancorp
Can any of the company-specific risk be diversified away by investing in both Affinity Bancshares 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 Affinity Bancshares and Eagle Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity Bancshares and Eagle Bancorp, you can compare the effects of market volatilities on Affinity Bancshares 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 Affinity Bancshares with a short position of Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity Bancshares and Eagle Bancorp.
Diversification Opportunities for Affinity Bancshares and Eagle Bancorp
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Affinity and Eagle is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Affinity Bancshares and Eagle Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp and Affinity Bancshares 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 Affinity Bancshares 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 Affinity Bancshares i.e., Affinity Bancshares and Eagle Bancorp go up and down completely randomly.
Pair Corralation between Affinity Bancshares and Eagle Bancorp
Given the investment horizon of 90 days Affinity Bancshares is expected to generate 0.46 times more return on investment than Eagle Bancorp. However, Affinity Bancshares is 2.15 times less risky than Eagle Bancorp. It trades about -0.01 of its potential returns per unit of risk. Eagle Bancorp is currently generating about -0.09 per unit of risk. If you would invest 1,685 in Affinity Bancshares on February 5, 2024 and sell it today you would lose (15.00) from holding Affinity Bancshares or give up 0.89% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.35% |
Values | Daily Returns |
Affinity Bancshares vs. Eagle Bancorp
Performance |
Timeline |
Affinity Bancshares |
Eagle Bancorp |
Affinity Bancshares and Eagle Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Affinity Bancshares and Eagle Bancorp
The main advantage of trading using opposite Affinity Bancshares and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity Bancshares 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.Affinity Bancshares vs. Korea Electric Power | Affinity Bancshares vs. Orix Corp Ads | Affinity Bancshares vs. SK Telecom Co |
Eagle Bancorp vs. Korea Electric Power | Eagle Bancorp vs. Orix Corp Ads | Eagle Bancorp vs. SK Telecom Co |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |