Correlation Between MT Bank and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both MT Bank 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 MT Bank and Eagle Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank Corp and Eagle Financial Services, you can compare the effects of market volatilities on MT Bank 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 MT Bank with a short position of Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and Eagle Financial.
Diversification Opportunities for MT Bank and Eagle Financial
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MTB and Eagle is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp 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 MT Bank 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 MT Bank Corp 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 MT Bank i.e., MT Bank and Eagle Financial go up and down completely randomly.
Pair Corralation between MT Bank and Eagle Financial
Considering the 90-day investment horizon MT Bank Corp is expected to generate 0.96 times more return on investment than Eagle Financial. However, MT Bank Corp is 1.04 times less risky than Eagle Financial. It trades about 0.01 of its potential returns per unit of risk. Eagle Financial Services is currently generating about 0.0 per unit of risk. If you would invest 15,215 in MT Bank Corp on December 29, 2023 and sell it today you would lose (735.00) from holding MT Bank Corp or give up 4.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 84.21% |
Values | Daily Returns |
MT Bank Corp vs. Eagle Financial Services
Performance |
Timeline |
MT Bank Corp |
Eagle Financial Services |
MT Bank and Eagle Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MT Bank and Eagle Financial
The main advantage of trading using opposite MT Bank and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank 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.MT Bank vs. Merchants Bancorp | MT Bank vs. Macatawa Bank | MT Bank vs. Axos Financial | MT Bank vs. Regions Financial |
Eagle Financial vs. Sun Life Financial | Eagle Financial vs. Procter Gamble | Eagle Financial vs. Bayview Acquisition Corp | Eagle Financial vs. Ep Emerging Markets |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Global Correlations Find global opportunities by holding instruments from different markets |