Correlation Between Eagle Bancorp and Inter Co

Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and Inter Co 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 Eagle Bancorp and Inter Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eagle Bancorp Montana and Inter Co Class, you can compare the effects of market volatilities on Eagle Bancorp and Inter Co 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 Eagle Bancorp with a short position of Inter Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and Inter Co.

Diversification Opportunities for Eagle Bancorp and Inter Co

-0.79

Correlation Coefficient

Eagle Bancorp  Inter Co

Pay attention - limited upside

The 3 months correlation between Eagle and Inter is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and Inter Co Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Co Class and Eagle 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 Eagle Bancorp Montana are associated (or correlated) with Inter Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Co Class has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Inter Co go up and down completely randomly.

Pair Corralation between Eagle Bancorp and Inter Co

Given the investment horizon of 90 days Eagle Bancorp Montana is expected to generate 0.43 times more return on investment than Inter Co. However, Eagle Bancorp Montana is 2.31 times less risky than Inter Co. It trades about 0.23 of its potential returns per unit of risk. Inter Co Class is currently generating about -0.2 per unit of risk. If you would invest  1,486  in Eagle Bancorp Montana on August 31, 2024 and sell it today you would earn a total of  254.00  from holding Eagle Bancorp Montana or generate 17.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Eagle Bancorp Montana  vs.  Inter Co Class

Eagle Bancorp Montana

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Bancorp Montana are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Eagle Bancorp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Inter Co Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inter Co Class has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Eagle Bancorp and Inter Co

The main advantage of trading using opposite Eagle Bancorp and Inter Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bancorp position performs unexpectedly, Inter Co 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 Inter Co will offset losses from the drop in Inter Co's long position.

The idea behind Eagle Bancorp Montana and Inter Co Class 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.