Correlation Between Flushing Financial and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Flushing Financial 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 Flushing Financial and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flushing Financial and Eagle Financial Services, you can compare the effects of market volatilities on Flushing Financial 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 Flushing Financial with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flushing Financial and Eagle Financial.
Diversification Opportunities for Flushing Financial and Eagle Financial
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flushing and Eagle is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Flushing Financial and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services and Flushing Financial 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 Flushing Financial 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 Services has no effect on the direction of Flushing Financial i.e., Flushing Financial and Eagle Financial go up and down completely randomly.
Pair Corralation between Flushing Financial and Eagle Financial
Given the investment horizon of 90 days Flushing Financial is expected to under-perform the Eagle Financial. In addition to that, Flushing Financial is 4.23 times more volatile than Eagle Financial Services. It trades about -0.11 of its total potential returns per unit of risk. Eagle Financial Services is currently generating about -0.27 per unit of volatility. If you would invest 3,000 in Eagle Financial Services on January 16, 2024 and sell it today you would lose (100.00) from holding Eagle Financial Services or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flushing Financial vs. Eagle Financial Services
Performance |
| Timeline |
| Flushing Financial |
| Eagle Financial Services |
Flushing Financial and Eagle Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flushing Financial and Eagle Financial
The main advantage of trading using opposite Flushing Financial and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flushing Financial 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.The idea behind Flushing Financial and Eagle Financial Services 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.| Eagle Financial vs. Putnam Short Duration | Eagle Financial vs. Royce Opportunity Fund | Eagle Financial vs. C4 TherapeuticsInc | Eagle Financial vs. LSI Industries |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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