Correlation Between Eagle Bancorp and Crazy Woman

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

Diversification Opportunities for Eagle Bancorp and Crazy Woman

0.0

Correlation Coefficient

Eagle Bancorp  Crazy Woman

Pay attention - limited upside

The 3 months correlation between Eagle and Crazy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bancorp Montana and Crazy Woman Creek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crazy Woman Creek 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 Crazy Woman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crazy Woman Creek has no effect on the direction of Eagle Bancorp i.e., Eagle Bancorp and Crazy Woman go up and down completely randomly.

Pair Corralation between Eagle Bancorp and Crazy Woman

If you would invest  1,513  in Eagle Bancorp Montana on December 24, 2024 and sell it today you would earn a total of  177.00  from holding Eagle Bancorp Montana or generate 11.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eagle Bancorp Montana  vs.  Crazy Woman Creek

Eagle Bancorp Montana

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Bancorp Montana are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Eagle Bancorp may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Crazy Woman Creek

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crazy Woman Creek has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Crazy Woman is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eagle Bancorp and Crazy Woman

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

The idea behind Eagle Bancorp Montana and Crazy Woman Creek 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.