Correlation Between ESSA Bancorp and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both ESSA Bancorp and Eagle Financial 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 ESSA Bancorp and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESSA Bancorp and Eagle Financial Bancorp, you can compare the effects of market volatilities on ESSA Bancorp and Eagle Financial 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 ESSA Bancorp with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSA Bancorp and Eagle Financial.
Diversification Opportunities for ESSA Bancorp and Eagle Financial
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ESSA and Eagle is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ESSA Bancorp and Eagle Financial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Bancorp and ESSA 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 ESSA Bancorp are associated (or correlated) with Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Bancorp has no effect on the direction of ESSA Bancorp i.e., ESSA Bancorp and Eagle Financial go up and down completely randomly.
Pair Corralation between ESSA Bancorp and Eagle Financial
If you would invest 1,452 in ESSA Bancorp on January 24, 2024 and sell it today you would earn a total of 148.00 from holding ESSA Bancorp or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.49% |
| Values | Daily Returns |
ESSA Bancorp vs. Eagle Financial Bancorp
Performance |
| Timeline |
| ESSA Bancorp |
| Eagle Financial Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ESSA Bancorp and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESSA Bancorp and Eagle Financial
The main advantage of trading using opposite ESSA Bancorp and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSA Bancorp position performs unexpectedly, Eagle Financial 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 Financial will offset losses from the drop in Eagle Financial's long position.| ESSA Bancorp vs. Cullman Bancorp | ESSA Bancorp vs. Home Federal Bancorp | ESSA Bancorp vs. First Financial Northwest | ESSA Bancorp vs. First Northwest Bancorp |
| Eagle Financial vs. Enterprise Financial Services | Eagle Financial vs. TC Bancshares | Eagle Financial vs. Pioneer Bancorp | Eagle Financial vs. LCNB Corporation |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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