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 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 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 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

Given the investment horizon of 90 days Eagle Bancorp is expected to under-perform the Crazy Woman. In addition to that, Eagle Bancorp is 3.09 times more volatile than Crazy Woman Creek. It trades about -0.02 of its total potential returns per unit of risk. Crazy Woman Creek is currently generating about -0.01 per unit of volatility. If you would invest  2,405  in Crazy Woman Creek on October 13, 2024 and sell it today you would lose (55.00) from holding Crazy Woman Creek or give up 2.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	25.6%
Values	Daily Returns

Eagle Bancorp  vs.  Crazy Woman Creek

Eagle Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eagle Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Eagle Bancorp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Crazy Woman Creek

Risk-Adjusted Performance

0 of 100

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 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.