Correlation Between Eagle Bancorp and SmartFinancial,

Can any of the company-specific risk be diversified away by investing in both Eagle Bancorp and SmartFinancial, 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 SmartFinancial, 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 SmartFinancial,, you can compare the effects of market volatilities on Eagle Bancorp and SmartFinancial, 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 SmartFinancial,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bancorp and SmartFinancial,.

Diversification Opportunities for Eagle Bancorp and SmartFinancial,

0.84

Correlation Coefficient

Eagle Bancorp  SmartFinancial,

Very poor diversification

The 3 months correlation between Eagle and SmartFinancial, is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and SmartFinancial, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartFinancial, 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 SmartFinancial,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartFinancial, has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and SmartFinancial, go up and down completely randomly.

Pair Corralation between Eagle Bancorp and SmartFinancial,

Given the investment horizon of 90 days Eagle Bancorp Montana is expected to generate 0.9 times more return on investment than SmartFinancial,. However, Eagle Bancorp Montana is 1.11 times less risky than SmartFinancial,. It trades about -0.52 of its potential returns per unit of risk. SmartFinancial, is currently generating about -0.53 per unit of risk. If you would invest  1,748  in Eagle Bancorp Montana on September 27, 2024 and sell it today you would lose (221.00) from holding Eagle Bancorp Montana or give up 12.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Eagle Bancorp Montana  vs.  SmartFinancial,

Eagle Bancorp Montana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eagle Bancorp Montana has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Eagle Bancorp is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

SmartFinancial,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SmartFinancial, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, SmartFinancial, may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eagle Bancorp and SmartFinancial,

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

The idea behind Eagle Bancorp Montana and SmartFinancial, 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.